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Mike Jackson
Director,
North American Vehicle Production
Forecasting & Industry Analysis
IHS Automotive
South Carolina Automotive Summit
20 February 2014
A Growing Global Role for
the US Automotive Industry
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent. 2
• Global Context
• North American Outlook
• Market Dynamics
• Summary
Presentation Outline
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Global light vehicle sales forecast Economics supports robust industry outlook
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Annu
al lig
ht vehic
le s
ale
s M
n u
nits • 83 million sales in 2013 (+4%); 86 million in 2014 (+3%)
• Global light vehicle sales to reach 100 million by 2018
Total sales 2014-20:
670 million vehicles
Copyright © 2013 IHS Inc. All Rights Reserved.
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85
105
50
60
70
80
90
100
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2008 2010 2012 2014 2016 2018 2020
Millio
ns
4 Copyright © 2013 IHS Inc. All Rights Reserved.
20million
9.7
4.1
3.6
2.0
1.5
.9
-1.7
-2 0 2 4 6 8 10 12
Greater China
South Asia
Europe
North America
South America
Middle East/Africa
Japan/Korea
Millions
Global Production
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
B (Fit)
B (Fiesta)
C (Focus)
B (Accent)
C/D (Civic/Accord)
C (Cruze)
B/C (Sentra)
C (Elantra)
C (Corolla)
C (Golf)
0 2 4 6
VW - MQB A/B
Toyota - NGA-C
Hyundai - HD/HD(2)
Renault/Nissan - CMF2
GM - D2XX/D3XX
Honda - CCA
Hyundai - PB/PB(2)
Ford - C1/C2
Ford - B2E
Honda - GSP/GSP(2)
Millions
• Nine of the Top-10
global platforms have or
will have exposure to
North America by 2020
• The march of global
platforms into
developing markets
accounts for overall
growth.
• Volume expansion also
driven by major OEM
platform consolidation in
B- through D-segments.
• Platform consolidation
alters competitive
dynamic toward larger,
more diversified players.
Segment (Top Nameplate)
North America Exposure
5
Top 10 Global Platforms - 2020
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
US-EU FTA Reality? Transatlantic trade negotiations underway
6
Economy
• Enhanced compatibility“ of regulations and
standards more likely than “same standards”
• Interchange-ability of standards being pushed
by industry (Safety standards a big hurdle)
• Elimination of all Bi-lateral auto tariffs likely
• Phase in period for ‘trucks’ (LCV and PUP’s)
• US EU – 47% of world GDP; 35% of global auto sales
• A strong FTA - add 0.4 to 0.5% p.a. to US and EU GDP
• To boost US-EU vehicle sales by 500,000 units
•To slow or reverse off-shoring of component
sourcing on both sides of the Atlantic?
•Current trade is quite small -US Exports
$5Bn to EU, Imports about $14Bn from EU
Harmonized
standards
Components /
Supply Chain
Tariff Free
Vehicle
Flows
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent. 7
• Global Context
• North American Outlook
• Market Dynamics
• Summary
Presentation Outline
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
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2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Mill
ion
s
NA Sales NA Production
Net Output Gain
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• From 2001- 2009, regional sales eclipse output by 27% or 3.7 million units
• Gap is slashed from 2012 – 2020, future sales outpace output by less than 10% or by 1.5 million units by 2018
• Positive sales trajectory tapers after peak in 2017 – US sales well below 2000 highs
Post Restructuring Pre-Restructuring
North America: Sales vs. Production
Lo
cali
zati
on
Exp
an
sio
n
Exp
ort
s
+2.2M
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Pro
du
ctio
n in M
illio
ns
• Shift from ‘recovery’ to opportunity targeting
• Shift in strategy – how to increase profitability in more stable market
• New investments begin in 2014, driving robust gains by 2015, ongoing into 2018
• Further volume prospects for exports & CKD volume
• Luxury strength retained, yet BRIC market sourcing prospects limit growth
Regional Outlook North America: Long-Term Forecast
95% of recovery by 2016
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1.7million
7.6million
9.6 million .4million Total Recovery Volume
8.6
11
.9
13
.1
15.4
16
.2
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.8
17.2
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.7
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.8
18.0
18
.1
18
.2
0
4
8
12
16
20
2009 2011 2013 2015 2017 2019
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent. 10
• Global Context
• North American Outlook
• Market Dynamics
• Summary
Presentation Outline
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
2020:
North American Exports Strong Regional Focus Drives Output Higher
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+2.0million exports
20% South
America
35% Europe
22% Middle East/
Africa
4% South Asia
12% China
6% Japan/
Korea
: US contributes 1.1M units, +116% vs ‘11
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
2020:
US Export Role Broad Demand Growth Drives Output Higher
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+ 2.2million exports
14% Europe
15% Middle East/
Africa 4%
South Asia
8% China
5% Japan/
Korea
4% South
America
40% Canada
10% Mexico
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
-3.5% CAGR -22% or -525K units
6.4% CAGR 54% or 1.6M units
1.2% CAGR 9% or 1.0M units
2013 – 2020
Production Outlook Regional Sourcing Migration Continues
11.8M
Factors Driving Optimization
• Currency Exposure
• Global Market Access–FTAs
• Global Platforms
• Net Landed Cost
13
1.9M
4.5M
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
0.60
0.80
1.00
1.20
1.40
1.60
2000 2002 2004 2006 2008 2010 2012
EUR/USD JPY/USD KRW/USD CAD/USD
Source: OANDA
₩
€
¥
C$
14 Copyright © 2013 IHS Inc. All Rights Reserved.
Exchange Rates Driving Sourcing Migration
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12 FTAs
44 countries
Why Mexico?
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Risk Reduction
Labor
Currency Logistics
>2.0million
• New capacity (transplants)
• Vehicle onshoring
• Exports (60% growth)
16
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
15.8
15.3
15.1
12.6
8.6
11.9
13.1
15.4
16.2
16.8
17.2
17.7
17.8
18.0
18.1
18.2
0%
20%
40%
60%
80%
100%
0
4
8
12
16
20
2005 2010 2015 2020
Millio
ns
NA Production Underutilized Capacity % Utilization
Production & Capacity
17
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
3.6 3.7 5.9 6.7
7.9
6.8 4.9
6.3 6.5
6.6
5.4
3.3
4.1 4.3
3.7
0
4
8
12
16
20
2005 2010 2015 2020
Millio
ns
Small Mid Large
Size-mic Shift
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© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
• North America is the
leading producer of
high-margin CUVs
• Positioned evolved
from strength in SUV
category, comes full
circle via global
platform deployment
• Powertrain advances
help drive role as
global exporter: BRIC
markets, ME/Africa, S.
America, China, etc.
• Region holds global
sourcing position for
luxury & volume brands
Production Outlook Global Output of D-/E-Segment CUVs By Region
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
NorthAmerica
Japan/Korea Europe Gr China SE Asia
Mil
lio
ns
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent. 20
• Global Context
• North American Outlook
• Market Dynamics
• Summary
Presentation Outline
© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent. 21
• Automotive Industry in US: Most competitive, Globally focused position ever
– Cost focus – Platforms, Currency, Logistics
– Product focus – Global portfolios: LCVs, pickups, CUVs, compact entries – powertrains, too
– Great Strides Made! - Yet hungry Developing nations seek own growth path
• Robust Growth Potential for OEMs/Suppliers to Meet Global Demand
– US is well positioned to build on and grow existing product strengths
– US Exports soar; positioned to pay dividends on restructuring, reduce risk
– Industry is at technology cross-roads – cutting edge engineering, materials, electronics
• Capacity Expansion Decisions Come to the Forefront
– Long-term Decisions, 30-year horizons, Broad Access to Global Markets is Key
– Transatlantic Trade and Investment Partnership – potential to dramatically reduce costs, by aligning
standards, reducing tariffs and growing economies within the trade bloc: Win-Win
Summary
Mike Jackson
Director,
North America, Vehicle Production
Forecasting & Industry Analysis
IHS Automotive
+1 248 465 2833 Direct
+1 248 388 8912 Mobile
Thank You!
