Automechanika Dubai Tuesday, September 30, 2014 1...Michael Dehn – GCC Car Modifications Conference Presentation on 29 September 2014 6 Programme t Standards Certification Legal

Automechanika Dubai Tuesday, September 30, 2014 1

Short presentations

Q & A

Lunch/Networking

AGENDA

SPEAKERS

Mr. Michael Dehn

Group Exhibitions Director

Epoc Messe Frankfurt

Mr. Subhash Joshi

Senior Analyst

Frost & Sullivan

Ms. Prachi Satoskar

Head - Automotive

GfK

GCC Car Modifications Conference 24 – 25 November, 2014 The Meydan Hotel Dubai, United Arab Emirates

Michael Dehn – GCC Car Modif ications Conference Presentation on 29 September 2014 5

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Day 1

November 24, 2014

Day 2

November 25, 2014


Our list of confirmed high-profile speakers includes:

Thank you for your attention! www.gulfcarmods.com

AUTOMECHANIKA DUBAI

The largest international

automotive aftermarket trade exhibition

in the wider Middle East

JUNE 2 - 4, 2015









18

Main Trans-Shipment Destinations for Automotive Related Products

281% increase from

2010 to 2014

37.5% increase from

2013 to 2014

673

859

1225

1376

1892

0

200

400

600

800

1000

1200

1400

1600

1800

2010 2011 2012 2013 2014

Trade Visitors from KSA

Mr. Subhash Joshi

Senior Analyst

Frost & Sullivan

Prepared by:

Automotive & Transportation Practice

Frost & Sullivan International Inc., Dubai

September 2014

Insights on KSA Automotive Market Passenger Vehicles and Spare Parts

23

Contents

Section Slide

Numbers

Vehicle Sales Section 4

Vehicle Parc Section 7

Spare Parts Section 11

Key Questions 16

24

Passenger Vehicle Industry – Sales

25

KSA Vehicle Sales—Trends …Past Trends and Current Market…. Overall growth of 5.3% CAGR (2008-2013)….. Current

Sales = 714,183 Units (2013)

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2008 2009 2010 2011 2012 2013G

row

th %

In U

nits

Passenger Vehicle Sales, Past Trends and Current Sale, KSA, 2008-2013

Cars & Pickups YoY Growth %

• KSA is the largest car

market in the region

• Used vehicles imports has

reduced by half over last 5

years, currently accounts for

nearly 4% of the total

vehicle market

• Market expected to grow at

CAGR 6.3% to reach about

a million (968,000) by 2018

CAGR – 5.3%

Source: Frost & Sullivan analysis.

26

KSA Vehicle Sales—Country Share …Japanese and Korean OEM’s will continue to dominate


Market Share: 54.2% (T- 40.2%)

Market Share: 24.9%

Market Share: 15.5% (GM -8.7%)

Market Share: 3.2%

Market Share: 2.2%

Japan South

Korea U.S.A

European

Union

Outlook (2018): 49.1%

Outlook (2018): 29.5%

Outlook (2018): 13.5%

Outlook (2018): 3.7%

MARKET SHARE BY COUNTRY OF BRAND (BRAND OF ORIGIN) , 2013 & 2018(f)

Others

Outlook (2018): 4.2%

2013 2013 2013 2013 2013

http://images.google.co.in/imgres?imgurl=http://ecx.images-amazon.com/images/I/51Nh3oCI7pL._SL500_AA280_.jpg&imgrefurl=http://www.amazon.com/VOLKSWAGEN-LOGO-Buckle-Jetta-Beetle/dp/B000Q6BLV0&usg=__2UqDqCZmikVwYBuXFTv7jUxdoAo=&h=280&w=280&sz=14&hl=en&start=7&sig2=FzwgriEikr5ZrRarcSYO9g&um=1&tbnid=v_KWoJDlKraSAM:&tbnh=114&tbnw=114&prev=/images?q=VOLKSWAGEN+LOGO&hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=mWf&sa=N&um=1&ei=RKqiSrj9C4aZkQXKjI33Dw

27

KSA Vehicle Sales—OEM Share …Hyundai/Kia increasing their presence; Toyota, dominance to continue – Major change

expected in Brand Share

OEMs 2013

Market Share

2018(f) Market Share

How customer perceives the Comments

Brand Product Network

40.2% 36.4% Strong across the GCC markets, leader in KSA

24.9% 29.5% Hyundai gaining market share in taxi segment

8.7% 7.3%

GMC considered good brand but Chevrolet has lower perception

GM rationalized its network from 3 dealers to 2 dealers, likely to rationalize to 1 by 2017

1.2% 8.0% Nissan perceived to be a costlier brand and has

limited reach in KSA, New dealer appointed to increase presence

6.9% 5.1% Investing to regain share, but outcome

uncertain

2.7% 2.9% Honda accord likely to gain good market share

** Includes Hyundai & Kia ^ ̂Includes all GM brands: GMC, Chevrolet, Cadillac & Hummer Other players like Suzuki, Proton, Mazda, Renault gaining their market share

**

^^

Low Medium High

Source: Frost & Sullivan

28

Passenger Vehicle Parc – Units In Operations

29

KSA Vehicle Parc (Units in Operations, UIO) …Past Trends and Current UIO…… Growth of 6.4% (CAGR 2008-2013)

Facts & Assumption: • Vehicles classified in two

categories to arrive at parc

numbers: Cars and Pickups • Life of the vehicle = 12 to 15 years

(depending on geography)

• Yearly salvage percentage considered for calculating the parc -

on an average, nearly 4.1% cars are salvaged every year out of total cars registered (in that year)

against ~7.0% pickups • Yearly exports percentage

considered for calculating the parc - on an average, nearly 8.7% cars are exported every year out of total

cars registered (in that year) against ~10.0% pickups

Overall 7.1 million passenger vehicles running on KSA roads (2013), where JRD region

accounts for more than 60% population (of vehicles)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2008 2009 2010 2011 2012 2013

Gro

wth

%

In M

illio

n U

nits

Passenger Vehicle UIO, Past Trends and Current UIO, KSA, 2008-2013

Cars & Pickups UIO YoY Growth %

CAGR – 6.4%


30

KSA Vehicle Parc—OEM Market Share …Toyota, GM and Ford are the leading payers….


Toyota, 51.4%

GM (Chevy, GMC), 12.6%

Ford, 10.5%

Hyundai,

10.2%

Kia, 2.9% Nissan, 1.8%

Mitsubishi, 0.7%

Others, 9.9%

Toyota is the leading player across the

GCC and dominates the KSA market with

more than 51% share

Nissan is rebuilding its brand through a

newly appointed distributor, target to sell

60,000 vehicles in 2014 and 150,000 by

2016

Ford is looking forward to de-risk its KSA

portfolio; we might see some major

changes in near future which will

strengthen their local presence in the KSA

We expect Toyota, Ford, Nissan and

Hyundai to dominate the parc in future

Parc, 2013: 7.1 Million Vehicles

OEM Wise Share

31

KSA Vehicle Parc (UIO)—Forecast and Other Facts …Expected Growth = CAGR 5.3% (2013-2018)

• Vehicle PARC highly dependent of past performance; we expect parc to grow at

CAGR of 5.3% – Stable environment to base decisions

• 9.1 million passenger vehicles to be in operations by 2018

• Japanese and Korean vehicle likely to dominate the UIO where Korean companies

(Hyundai) will increase its market share by almost 7-8% (to reach approx 16% by

2018)


• More than 5 year old vehicle = 55% (expected in 2018 = 50%)

• More than 10 year old vehicle = 22% (expected in 2018 = 18%)

• The average age of the vehicle in KSA

− 2013 = 7.5 years

− 2018 = 7.0 years (expected)

• Average mileage

• 2008 – 23,700

• 2013 – 30,715

• 2018 – likely to reach at 32,620 by 2018

32

KSA Auto Components Market

33

KSA Spare Parts Market—Overview Total Market – USD 3.8 billion (2013)

Important Segment Characteristics

Factors Assessment Trend

Market Age Growth ▲

Current Opportunity Size ($ B)—2013 3.8 —

Future Opportunity Size ($ B)—2018 5.5 ▲

Forecast Period

Market Growth Rate 7.7% ▲

Dependency on Imports Very High ●

Number of Competitors ---------- ▲

Degree of competition* 7 ▲

* On scale of 1 to 10 where 1 indicates low level of competition among existing participants and 10 indicates the

highest .

TREND Decreasing Stable Increasing

▼ ● ▲

Note: Market size estimations only includes imported components . All figures are rounded. The base year is 2013. Source: Frost & Sullivan analysis.

34

KSA Spare Parts Market—Breakup by Category of Parts

• The key Servicing & Maintenance parts include

Filters, Spark Plugs, Belts, Brakes

Pads/Shoes/Linings…..

• Average vehicle runs for passenger vehicles in KSA

is more than 30,000 kilometer, this has grown by

almost 30% in last 5 years

• These vehicles are categorized in 4 categories –

Private Cars, Taxi, Rental Car and Leasing

• Unlike UAE, KSA does not have strict regulation to re-

register vehicle every year, the re-registration

happens every 5 years (for private vehicles) and

every 3 years (for taxies)

Mechanical, 22%

Collision, 34%

Maintenance, 44%

Auto Components Market: Percent Sales Breakdown by Type

of Auto Component, KSA, 2013

• The yearly maintenance cost include 3 to 4 minor service and 1 Major service

• Average maintenance cost in Taxi & Leasing segment = Minor Maintenance = SAR 320-350; major Maintenance = SAR 2,000-2,500

• Rental Car = Minor Maintenance = SAR 300-330; Major Maintenance = SAR 2,000-2,500

• Private Segment = Minor Maintenance = SAR 400-450; Major Maintenance = SAR 2,000-3,000

1 USD = 3.75 SAR Source: Frost & Sullivan analysis.

35

Channel Analysis 6 routes exist for supply of parts in the KSA Aftermarket with increasing competition from OE parts

Parts Supply

OES

OE Parts

Alternate Parts

Imports

Spurious

System Suppliers

Example

Bosch Chassis Systems

supplying brake components

Note : OES – Original Equipment Spares

OE Parts – OE fitted brands supplied in independent after market

Alternate parts – Brand other than OE brand supplied in the independent after market

Spurious – Products which are not original and branded as original popular brands in the market

Imports – It includes domestic imports, which means a part is directly getting imported from the country of origin

without involving local operation other supplier

System suppliers – They supply the brand under their name eg. Bosch braking products

Domestic Imports


36

Channel Analysis (Continued) ….Channel size analysis

• OES dominates the market due to

strong presence of their NSCs (vehicle distributors also deals in independent after market)

• A vehicle distributors typically operates through 5 channels to

supply parts = 1. Workshop Servicing Channel; 2. Workshop Counter Sales Channel; 3.

Wholesale Fleet Channel, 4. Wholesale Dealer Channel and 5.

Exports (limited to Sudan, Egypt)

• Domestic Import is becoming the key channel due to higer margin

kept by NSCs while dealing in OES and OE parts

OES 30%

OE Parts 26%

Alternate Parts

12%

Domestic Imports

15%

Spurious 14%

System Suppliers

3%

Channel wise sales breakup, approximate, KSA, 2013

The OES, OE Parts and domestic imports (Genuine Parts) are the key channels accounts

for nearly 71% in total part sales

Total market: $3.8 Billion


37

Key Questions & Hints?

• Trading vs Physical Setup?

• Trading vs Manufacturing?

• OEMs/Vehicles offering potential for Parts?

• Markets to look for?

38

www.frost.com

Subhash Joshi Industry Manager Automotive & Transportation Practice Middle East, North Africa and South Asia Frost & Sullivan International Inc. 210, EIB-4 BT Building Dubai Internet City PO Box: 502395 Dubai, United Arab Emirates Ph: +971 4 4331 893

For Media queries, contact: Tanu Chopra Senior Manager- Corporate Communications Middle East & North Africa Email: [email protected] Website: www.frost.com

State your need, we would be happy to serve you…

CONTACTS

mailto:[email protected]

39

Thank You

40 © GfK 2014 | Key to Saudi Arabia

KEY TO SAUDI ARABIA –

RIGHT SEGMENTATION Prachi Satoskar


GfK. Growth from Knowledge. Trusted for quality. For 80 years.

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GfK Retail Panel Retail Data | POS Data | Product Data

GfK Household Panel Buyer Data | Purchase Data | Equipment Data


GfK Retail Panel

Definition of product group

Definition of distribution channel

Definition of corresponding

universes

Sample definition – based on statistical

methods

Data syndication from sample

Data check, identification and

extrapolation to the universe

Communication of the results

GfK Retail Panel process


Audited product groups

Passenger

Car

Tyres

4x4

SUV

Tyres

Light

Truck

Tyres

New Truck Tyres

Remoulded Truck Tyres

EM- / Agriculture Tyres

Motorcycle Tyres

Bicycle Tyres…

Car Tyres Truck Tyres Not audited


Country scope

Europe East

Czech Rep.

Greece

Hungary

Kazakhstan

Poland

Romania

Russia

Turkey

Ukraine

Europe West

Austria

France

Germany

Italy

Netherlands

Spain

Portugal

UK

New

Middle East

Saudi Arabia


Africa

Egypt

Asia Pacific

Australia

Japan

Taiwan

China

Future

Future

Future

Indonesia

Malaysia

Philippines

S. Korea

Thailand

India

North America

USA Planned


Saudi market – market with a large potential

*Cov erage: the cov erage v aries f or each country

UAE: 70%, KSA: 65%, Germany : 54%, Italy : 79%

Source: Gf K’s retail sales tracking data. July 2013 – July 2014

High Value Inspite of Lower Population than Developed Countries

1.402 1.563

1.794 2.062

698 632 458 474

3.668

10.956

3.272

6.037

3.699

8.286

4.008

5.886

141 146 177

205

80 75 75 85

488

1.017

441

828

526

1272

561

847

0

200

400

600

800

1000

1200

1400

0

2

4

6

8

10

12

US

D M

io

Ths. U

n. (x

1.0

00)

Jul 13 Oct 13 Jan 14 Apr 14

Sep 13 Dec 13 Mar 14 Jun 14

Saudi Arabia Italy Germany United Arab Emirates

Population: 28.8 mil (2013)

Total 12 Months (units): 6.8 mil

Total 12 Months (Val): 668K US$ Population: 9.3 mil (2013)

Total 12 Months: 2.65 mil

Total 12 Months (Value): 315K US$


Total 12 Months (Units): 23.9 mil

Total 12 Months (Value): 3.1Mi US$


Total 12 Months (Units): 21.8 mil

Total 12 Months (Value): 3.2Mi US$







Ths.Un. USD MIO


SUV / 4x4 Cars loved by the People

Source: GfK’s retail sales tracking data. July 2013 – July 2014

SUVs /

4x4s

Higher Percentage for 4x4 even compared to developed markets due to Off Road / Desert Driving

86%

4%

10%

88%

6% 6%

78%

19% 3%

70%

19%

11%

Passenger car 4x4 Light Truck

Saudi Arabia

Italy

Germany



KSA: 4x4 dominated by premium brands – lesser competition in

brands and items

PRJ 79961 - RG 4051691 - RP 23118107 - ID 427755633

With lower number of brands in passenger and 4x4 compared to developed market, more opportunities available

109

53 55

2,485

577

204

0

500

1,000

1,500

2,000

2,500

0

20

40

60

80

100

120

No

. of Ite

ms (x

1.0

00)

No

. o

f b

ran

ds

Passenger Car Tyres Light Truck Tyres 4x4 Tyres


Germany: 163 Brands

Italy: 178 brands

Germany: 74 Brands

Italy: 91 brands

Germany: 107 Brands

Italy: 105 brands


KSA: 14% of the Items contribute 80% of Sales for

Passenger Car and 4x4

PRJ 79961 - RG 4051691 - RP 23118107 - ID 427755633

11% of brands contribute 80% value for Passenger Car vs. 15% for 4x4

12 8 11

343

79

35

345

80

36

0

100

200

300

400

No.

of

bra

nds

Brands making 80% Sal Val

Items making 80% Sales Val

Items making 80% Sales Units

Passenger Car Light Truck 4x4



Most of the brands and items operating in the western region contributing

54% of the market volumes and 52% in value

5.0 5.2

18.2 19.1

22.9 23.7

54.0 52.0

West

Central

East

South

67.4

28.4

4.3

68.6

29.3

2.0

71.1

27.5

1.5

67.2

29.9

2.9

Passenger Car

Light Truck

4x4

West Central East South Sales Units

% Sales Value

%

Jul 13-Jul 14 Jul 13-Jul 14

Ths.Un.

MIO.USD

Selling Brands

Selling Items

SAL./SHOP

3,829

359

105

2,445

203

1,589

160

100

1,980

165

1.277,0

131,9

81

1.521

237

348,0

35,5

68

996

127

7.469 540.056 Ths

West main contributor for all the Segments



Mainly Budget Items selling in Passenger Cars compared to

the Premium in 4x4

18.6 19.3 16.2 15.8 698 632

458 474

30.2 29.8 28.8 25

2.7 2.2 7.3

19.5

11.2 11.0 10.6 10.0

7.8 7.3

6.6 6.1

18.6 1.017 19.2

19.4

9.2 12.4

10.0

8.5

12.8 12.1 12.7 13.3

8.5 8.2

8.9 8.2

22.6 21.5 21.7 26.3

6.1 5.4

6.9

7.5

8.4 8.4 8.4 8.4

5.5 5.3

5.6 5.9

14.8 15.3 14 14.3

7.7 9.2

11.8

10

7.9 7.5 7 7.2

8.3 7.9

7.2 7.4

6.8 6.3 6.6 6.9

11.2

12

7.6

7

7.3 7.5 7.8 7.7

8.7 8.6

9.1 9.0

3.5 4.2 4.1 3.8

15.3

14.0 14.8

11.9

9.1 9.1 10.4 10.7

11.6 11.8

12.8 13.6

2.7 2.5 4.4 3.2

19.4 15.8 15.1

14

7.8 8 8.6 8.6

11.2 11.1 12.2 11.9

8.4 12.1 10

9.6

9.2 9.6 10.4 11.2

13.2 13.7 14.9 15.9

12.3 11.1 10.2

8.2

7.7 7.5 8 7.1 11.3 10.9 11.7 10.3 7.7 5.8 6.3 3.9

0 < 200 LC

200 < 250 LC

250 < 300 LC

300 < 350 LC

350 < 400 LC

400 < 450 LC

450 < 500 LC

500 < 600 LC

600 < 700 LC

>= 700 LC

Total Passenger Car 4x4 Light Truck

8

3,0

9

3,4

MioSAR

Share

254

100,0

259

100,0

255

100,0

235

100,0

168

65,9

174

67,0

170

66,4

159

67,5

79

31,0

78

30,0

77

30,2

67

28,4

8

3,2

10

4,0



Passenger Car: 35% value from >=17“, with fewer brands and selling items

78 81

78

66

43

16 22 24

322

550 510

462

271

135 125 150

1,123.3

52.5

1,887.0

69.9

1,399.7

87.3

716.5

114.4

192.5

174.2

94.5

237.2

175.4

223.2

184.7

227.2

Ths.Un.

PRICE USD

Selling

Brands

Selling

Items

7.8

4.4

6.7

16.3

24.3

26.2

11.7

1.9 13"

14"

15"

16"

17"

18"

19"

20"

Others

13” 14” 15” 16” 17” 18” 19” >= 20"-23"



SUV/4x4 Car: 59% Value from >=17“, With Fewer Brands and Selling Items

4

22

39 37

16

6

15 17

4

49

175

158

73

28

71

92

6

69.4

133

103.5

517

152.4

531

130.9

83

190.1

19

277.6

77

273.7

83

227.7

Ths.Un.

PRICE USD

Selling

Brands

Selling

Items

10.1

2.6

7.6

38.0

33.7

6.7 14"

15"

16"

17"

18"

19"

20"

Others

11% of brands contribute 80% value for Passenger Car vs. 15% for 4x4

13” 14” 15” 16” 17” 18” 19” >= 20"-23"



Conclusions

1. High Value Market – High Ratio of Population to Consumption

2. Huge Potential for 4x4 Tyres – contributing high Value

3. West remains the Focus Area

4. Key to Market – Focus on the Less Congested Segments of 4x4

5. >17” with high demand potential and less competitions is a niche

area to enter


Prachi Satoskar

Head – Automotive

[email protected]

+9714 4296713

Questions?


Responding to the wide-ranging transformative change in the automotive industry with consumers’ changing desire and digital demands,

automotive companies need the insights as foundation of winning strategies that ensure competitive differentiation through distinctively engineered and designed products and services.

GfK’s automotive industry experts provide insights into today’s markets and consumers’ demand of tomorrow by looking at consumer, retail and media data. Combining deep global industry skills with proven market research expertise, we turn research into smart business decisions

for automotive companies to create winning strategies that translate into revenue.

THANK YOU


Prachi Satoskar

Head – Automotive

[email protected]

+9714 4296713

Documents

Automechanika Dubai Tuesday, September 30, 2014 1...Michael Dehn – GCC Car Modifications Conference Presentation on 29 September 2014 6 Programme t Standards Certification Legal