1. business and industrial

Global Economic and
Automotive Trends &
Developments
Presented by:
Gavin Maile
South African Automotive Week
15 October 2014
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
1
Global Economic and Automotive Trends & Developments
Agenda
1. Global, African & South African Economy
2. Global Automotive Trends & Developments
3. KPMG Global Automotive Executive Survey 2014
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
2
Some news headlines about the global economy
Global
economy one
shock away
from another
crisis – The
Telegraph
Manufacturing
spearheads
stronger global
growth – Saxo
Bank
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
3
Global outlook: main messages from the GEP (Worldbank)
“Shifting priorities, building for the future”
High income country recovery is underway
Developing country growth to pickup slowly, as tailwinds from stronger high-income growth
are countered by capacity constraints and an eventual tightening of financial conditions
Regional prospects vary
Global risks have declined but prospects remain sensitive to volatility in financial markets
Over the medium-term macroeconomic policy needs to tighten in order to increase resilience
and, in some countries, alleviate inflationary pressures
Medium-term growth will have to come from structural reforms that boost growth potential
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
4
Global economy: GDP growth forecasts (Worldbank)
Developing countries
World
3.4
2.5
3.5
5.4
High income countries
5.5
2.4
2.8
1.9
2.4
1.5
4.8
2012 2013 2014 2015 2016
2.5
4.8
1.3
4.8
2012 2013 2014 2015 2016
2012 2013 2014 2015 2016
3.4%
5.4%
2.4%
Growth outlook revised downwards
from 3.8% at the beginning of the year
to a more modest 3.4% in July. The
recovery
is
continuing,
but
momentum has slowed down and
there are risks that might derail the
move towards a healthier economy.
Growth outlook revised upwards from
4.8% at the beginning of the year to a
more aggressive 5.4% in July.
Capacity constraints, slower local
reforms and political tensions in some
areas are, however, potential risks to
the future growth outlook.
Growth outlook revised upwards from
1.9% at the beginning of the year to
2.4% in July. Mixed signals and
uneven
recovery
of
developed
economies, with patches of very
exciting growth and patches of bad
news.
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
5
The global powerhouses (World Bank)
#8
#6
#1
United States
Projected GDP 2014: 17.5 trillion
Projected GDP 2019: 22.1 trillion
#4
#5
#9
#1
#2
China
#2
#3
#10
Projected GDP 2014: 9.1 trillion
Projected GDP 2019: 14.8 trillion
#7
Japan
#3
Projected GDP 2014: 4.9 trillion
Projected GDP 2019: 5.7 trillion
#4
Projected GDP 2014: 3.6 trillion
Projected GDP 2019: 4.9 trillion
#5
Projected GDP 2014: 2.7 trillion
Projected GDP 2019: 3.6 trillion
Germany
France
United
#6 Kingdom
Projected GDP
2014: 2.5 trillion
Projected GDP
2019: 3.7 trillion
#7
Brazil
Projected GDP
2014: 2.2 trillion
Projected GDP
2019: 2.9 trillion
#8
Russia
Projected GDP
2014: 2.1 trillion
Projected GDP
2019: 2.5 trillion
#9
Italy
Projected GDP
2014: 2.1 trillion
Projected GDP
2019: 2.6 trillion
#10 India
Projected GDP
2014: 1.8 trillion
Projected GDP
2019: 3.1 trillion
Source: World Bank
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
6
How healthy is Africa? (Economist Intelligence Unit)
Sub-Saharan Africa average annual GDP growth 2006 - 2013
10.6%
Ethiopia
7.9%
Sierra
Leonne
6.3%
Uganda
7.7%
Ghana
4.7%
Kenya
6.8%
Nigeria
9.5%
Angola
6.8%
Tanzania
6.5%
Zambia
3.7%
South
Africa
6.2%
Botswana
8.1%
7.1%
7%
7.2%
Mozambique
Forecasted growth for
2014: 1.5%
Q2 2014: +0.6%
(lower than expected
+0.9%)
Forecast average annual GDP growth 2014 - 2019
7.0%
6.95%
6.9%
Mozambiq Tanzania China Ethiopia Cote
Nigeria
D’lvoire
ue
6.4%
Kenya
6.1%
India
6.0%
5.1%
4.3%
Angola Cameroon Ghana
2.65%
South
Africa
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
2.65%
Brazil
2.65%
United
Kingdom
2.5%
1.9%
USA
Russia Germany France
1.5%
1.45%
7
South Africa: a story of confidence (or a lack thereof) (BER)
BER’s BCI survey
55
Neutral at 50
52
52
48
47
47
The BCI survey question: Respondents are asked to rate current
business conditions as "satisfactory" or "unsatisfactory".
48
46
46
44
43
42
41
39
48
43
Respondents rated business conditions as unsatisfactory as the
index is below 50.
41 41
38
36
Sept
2014
However, it has increased by five points to 46 in 2014Q3.
This implies that close to 54% of respondents continued to
be unhappy with prevailing business conditions.
28
23
Sept
2009
The SACCI Business Confidence Index (BCI)
Confidence among
wholesalers
by 15 index
points.
Sentiment among new vehicle
dealers
15 points in the
third quarter
The BCI survey question: Respondents are asked to rate current
business conditions as "satisfactory" or "unsatisfactory".
The index increased slightly to 89.2 in September from 89.0 in
August 2014.
Retailers, building contractors and
manufacturers, the business mood
11, 8 and 3 points respectively
by
Although it appears that waning business confidence has been checked,
business confidence remains at an undesirably low level
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
8
South Africa: a story of confidence (or a lack thereof) (BER)
BER’s CCI survey questions
15
14
15
14
11
Sept
2009
Sept
2014
9
6
4
5
5
1
4
1
1
-1
Neutral at 0
-3
-1
-3
-7
Consumer rating
-8
-7
-6
2
How do you expect the general economic position in South Africa
to develop during the next 12 months?
 Improve considerably
 Improve slightly
 Deteriorate slightly
 Deteriorate considerably
 Don’t know
How do you expect the financial position in your household to
develop in the next 12 months?
 Improve considerably
 Improve slightly
 Deteriorate slightly
 Deteriorate considerably
 Don’t know
slipped from +4 to -1 index points during 2014Q3
The confidence levels of high income consumers remain notably higher
compared to that of low income consumers, with wealthy consumers
being particularly optimistic about the outlook for their household
finances.
3
What is your opinion of the suitability of the present time for the
purchase of domestic appliances such as furniture, washing
machines, refrigerators etc? Do you think that for people in general
it is the right time, neither a good nor a bad time or the wrong time?
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
9
South Africa’s standing amongst developing economies (Economist Intelligence Unit)
ECONOMIC POWER (2012)
BRICS will represent
32% of global
economic output by
2017
2017
11.9%
Brazil
US$ 20 bn
Russsia
13.3%
5th BRICS summit in
Durban, BRICS bank
and BRICS business
council
2012
India
China
SA
14.2%
2.2%
In 2010, South Africa
joined an expanded
BRICS group
US$ 13 bn
58.4%
MARKET SIZE
In 2009, the first BRIC
summit was held
2001
US$ 3.3 bn
0%
20%
South Africa
40%
Russia
60%
Brazil
80%
India
100%
China
Jim O’Neill of
Goldman Sachs
created and coined
the term BRIC to
identify the world’s
fastest growing
economies
Total GDP of US$ 22.3 billion
Representing 27% of total global economy
Population about 40% of global population
Source: Economic intelligence Unit
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
10
South Africa’s competitiveness (Global Competitiveness Report)
Overall ranking
Restrictive labour regulations
56
This little
island is
beating us
Inadequately educated workforce
Inefficient government bureaucracy
Institutions
Infrastructure
36
60
Economy
Health and
education
89 132
Higher
education
Labour
market
86 113
.© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
. International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG
Financial
markets
Innovation
7
43
11
Global Economic and Automotive Trends & Developments
Agenda
1. Global, African & South African Economy
2. Global Automotive Trends & Developments
3. KPMG Global Automotive Executive Survey 2014
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
12
KPMG’s view on impending changes in automotive value chain
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
NEW COMPONENTS
SUPPLIER
IS AND
CONNECTIVITY
TIER '0.5'
NEWCOMER
OEMs
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
CAR RENTAL AND
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
13
KPMG’s view on impending changes in automotive value chain
SUPPLIER
AUTOMOTIVE
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS AND
CONNECTIVITY
Tier 1 Suppliers
■ Vehicle and engine module / system
manufacturing
TRADITIONAL
PLAYERS
Tier 2 Suppliers
■ Automotive parts manufacturing
(suspension, steering and driveline)
Tier 3 Suppliers
■ Automotive parts manufacturing and raw
material processing
Electric Components and Light
Weight Materials Suppliers
NEW
PLAYERS
■ Batteries, e-motors, power electronics
and semi-conducters
■ Carbon-fiber chassis and auto parts
Information Systems and Connectivity
Companies
■ Telematics, wireless communication,
infotainment, and mobile payment
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
14
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
Suppliers – Market Segmentation
AUTOMOTIVE
IS &
CONNECTIVITY
NEW COMPONENTS
SUPPLIER
Supplier Market Segments
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
VALUE CHAIN
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Key Electric Components
Outside-car Components
In-car Components
Charger
Charging
Station
Li-ion
Battery
Pack
Inverter
+DC/DC
+ EV Control
Electric
Motor
New e-components
KEY TRENDS
Region
Safety
Innovation
Quality
Emerging
Consolidation
Markets
Sustainability
Collaboration
Rationalizing
Capacity and
Production
Leveraging
Cost Benefit
Profitability
Expansion
Growth
Aftermarket
Western
Europe
US
Japan
Brazil
Russia
India
China
RoW
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
very
distinctive
not
15
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
New Components – Electric Components
AUTOMOTIVE
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Importance of Key Trends for Electric Components Suppliers
Key Trend
Priority Comment
Quality
Potential EV buyers are concerned about the driving range of EVs. OEMs
are trying to find various methods, such as using towed generator system
or providing training to drivers, to increase distance on a single charge.
Safety and
Reliability
High temperatures shorten the life of lithium-ion batteries, while cold
temperatures diminish their power capabilities and affect overall vehicle
performance.
Cost
High cost of EVs will discourage potential buyers. Also, the cost of
charging infrastructure and batteries will affect the industry.
Infrastructure
Developed markets such as Western Europe and the US have started
formulating policies to expand public charging infrastructure. However, it is
still very immature in other regions.
Government
Intervention
Governments have taken initiatives to encourage the EV industry by
providing tax breaks on purchase and investments in R&D. However, with
no clear guidelines, there could be a delay in the rollout of EVs.
Top (Vehicle) Battery Manufacturers 2012
OEM Strategies to Access Battery and E-Component Know-How
Make
Buy
■ With three fully
owned battery plants
already operating in
Europe, the RenaultNissan Alliance tries
to keep the battery
production for their
EVs in-house.
■ Newcomer OEMs
such as BYD and
Tesla Motors
produce ecomponents inhouse.
■ BMW and FiatChrysler buy battery
technology from the
South Korean
battery specialist SB
LiMotive instead of
engaging
themselves in the
development and
manufacturing of
battery cells and
packs.
Cooperate
■
■
■
Daimler operates two
JVs with Evonik for
battery packs and cells
— Deutsche
Akkumotive and LiTec
Battery.
Daimler recently
announced plans to
form a JV with Bosch,
to produce e-motors.
VW jointly develops
lithium-ion batteries
with Sanyo/Toshiba.
Company
Source: Company website
B
Country
Customers / Partners
Panasonic
Japan
Toyota
LG Chem
Korea
GM
BYD Co. Ltd.`
China
BYD
Samsung SDI Co.,
Korea
Ltd.
Telsa Motors, VW
GS Yuasa
Japan
Mitsubishi (i-MiEV), PSA (Peugeot
iOn, Citroen C-Zero)
Saft Groupe
France
Johnson Controls, GM
Tesla Motors
US
Daimler (Smart EV), Toyota
China BAK Bat.
China
GM, FAW Group
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
very
distinctive
not
16
FINANCIAL SERVICE PROVIDER
New Components – Light Weight Materials
CONVENTIONAL DEALER
AUTOMOTIVE
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
Carbon Fiber as Future Light Weight Material in Automotive
■ For example, BWM’s ‘project i’ under the
project, environment-friendly models are
developed and launched in mass
leveraging carbon fiber also thinking
beyond environmentally-conscious and
agile driving. Sales Price: > US$55,000
Release Date: 2013
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Importance of Key Trends for Light Weight Materials Suppliers
Key Trend
■ Carbon fiber is strong, stiff and light and
therefore well fit for automotive structural
parts.
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
Priority
Comment
Safety
Contrary to popular belief, carbon fiber is stiffer and five times stronger than
steel. In addition, it has a higher energy-absorption rate than steel and can
increase safety in a collision.
Cost
Companies are innovating new techniques to reduce the cost of carbon fiber,
such as use of ‘forged composites’ manufacturing process by Lamborghini
and Callaway Golf Co, and mass production of a mold for an automobile frame
by Teijin Limited.
Fuel
efficiency
With tough fuel economy mandates set by developed countries, many OEMs
(such as GM) are planning to use carbon fiber.
Innovation
Companies are developing new innovative methods to improve the quality of
the carbon fiber and reduce production time for mass usage.
Range: ~ 100 miles
Weight Reduction: > 400 lbs
OEM Strategies to Access Battery & E-component Know How
Advantages
+ Car weight reduction in favor of
heavy but necessary auto parts
(e.g. lithium-ion battery packs)
+ Increased fuel efficiency through
lighter weight
Disadvantages
-
-
+ Reduced exhaust emissions via
higher fuel efficiency
+ Improved passive and active
safety owing to higher material
strength than aluminum or steel
-
Company
Very high material costs (CFP
component can cost nearly five
times more than the same part
made from aluminum)
Very time-consuming
manufacturing cycle (e.g. handpositioning layers of fiber,
lengthy bonding process)
In contrast to aluminum or steel,
no post-processing applicable
(scrap can be around 30 percent)
Source: Company website
B
Selected Light Weight Materials Suppliers 2012
Country
Customers / Partners
Mitsubishi
Chemical Holding
Japan
N/A
Toray Industries
Japan
Daimler AG (JV)
Voith
Germany
Audi
Teijin
Japan
N/A
SGL Carbon
Germany
BMW (JV), VW (minority stake),
PSA
Zoltek Companies
United States
N/A
Oya Carbon Co.,
Ltd. (Oya Co)
China
N/A
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
very
distinctive
not
17
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
IS and Connectivity – Overview
AUTOMOTIVE
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
Trends toward Connected Cars
■ Modern cars are increasingly
turning into smart and webconnected ‘mobile platforms.’
■ OEMs try to integrate the
trends in consumer
electronics, in order to
generate a new ecosystem of
revenue as others may run
dry in the future.
Entertainment
■ Consumer electronics
for passenger
amusement in front
and rear seats (e.g.,
iPod, satellite radio,
TV and car PC
system)
2025
2010
Car maintenance and
Optimization
■ Remote diagnostic
application
■
Leveraging convergences via cross-sector partnerships
■ Tier 1 supplier Delphi and Autonet Mobile, a provider of internet-connectivity
telematics, signed an agreement to develop and market a wireless connectivity
platform, to deliver entertainment and downloadable content to vehicles in motion.
■ Hyundai and Microsoft jointly set up an ‘Automotive IT Innovation Center’ to
develop next generation infotainment systems, including multimedia and navigationrelated features.
■ Ford and Microsoft have already joined forces to equip Ford cars with a voicecontrolled communications and entertainment system. Recently, they expanded their
partnership to introduce an electricity grid management tool to Ford’s new electric
models, which helps consumers to time car charging to periods when energy use is
lower and therefore cheaper.
■ Bosch Group and Vodafone integrated their machine-to-machine (M2M) platforms,
to offer businesses a simple way of wirelessly connecting products to the internet.
Source: Reuters
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
“You get more and more connectivity between cars as well as between
manufacturer and driver.” – Eberhard H. Kern, Mercedes Benz India,
June 2013
Electronical
parts
■ Importance of mechanical
parts for future automotive Mechanical
value creation is decreasing.
parts
TIER ‚0.5‘
Possible application areas of connectivity-based technologies
Shift in value creation in the
Automotive Business
Software
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
■
Source: Press Release
Safety / Security
■ In-vehicle tracking system (intelligent black box
checking and tracking car conditions)
■
Personalization of car access and driver
settings
■
Automatic security distance maintaining system
(based on speed and weather conditions)
■
Home video alarm monitored from the car
Chips and controller
for variable speed
drive intelligence in
order to produce
Smart Motors that
reduce energy
consumption and
CO2 emissions
Telemetry to collect
vast amount of data
to fine tune car
performance
monitoring
Commerce
■ Mobile payments system (charging tolls,
parking fees, buying tickets, shopping)
■
Communication
■ Telephone video
call, email, SMS,
internet access
to connect to
remote users.
Usage of the car recording system (miles per
year, day of the week …) to be correlated with
premiums for car insurance (e.g., every week,
the car dashboard signals the cost of car
insurance)
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Infomobility
■ GPS navigations providing drivers
info (news, available parking,
alternative routes, shops, tourist
areas, traffic situation, CO2 route
optimization, points of interest, etc)
18
KPMG’s view on impending changes in automotive value chain
ORIGINAL EQUIPMENT
MANUFACTURER
AUTOMOTIVE
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS AND
CONNECTIVITY
TIER '0.5'
NEWCOMER
OEMs
Original Equipment Manufacturers
■ Vehicle and engine design,
manufacturing, and assembly
TRADITIONAL
PLAYERS
■ Brand management
■ Several OEMs vertically integrate e-car
value chain steps, from battery
manufacturing to e-motor production
■ Supplier, dealer and customer financing
via captive financial service arms
Newcomer OEMs
■ Immature e-technologies and relatively
low complexity allow newcomers to
compete with established players
NEW
PLAYERS
Tier ‘0.5’ Suppliers
■ Tier 1 suppliers upgrade to contract
manufacturers
■ Complete car design and development
capabilities, including production
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
19
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
OEMs – Global Market Segmentation
AUTOM OTIVE
NEW COMPONENTS
SUPPLIER
Definitions of Vehicle Types
LV Sales (Million Units)
Source: Estimates, KPMG analysis
100
80
60
40
20
50.4
52.5
16.7
16.8
18.1
53.5
17.9
30
17.8
18.5
65.0
19.3
32.8
68.8
20.0
35.0
18.4
20.4
22.3
23.9
26.6
29.9
13.4
13.2
12.1
11.7
11.9
12.3
13.0
13.8
2010
2011
2012
2013
2014
2015
2016
2017
0
TRIAD
BRIC
RoW
LCV Sales (Million Units)
48.6
56.4
60.7
WEB 2.0 BROKER
22
21
20
20
87
22
21
99
23
104
24
38
42
45
25
27
29
31
34
29
30
31
31
32
33
34
36
2010
2011
2012
2013
2014
2015
2016
2017
TRIAD
BRIC
RoW
LCV Sales Development by Market Cluster 2010-17e
Source: LMC Automotive Q2 2012
PV Sales (Million Units)
Source: LMC Automotive Q3 2013
60
10
81
83
74
77
93
16
70
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
0
80
20
TIER ‚0.5‘
NEWCOMER
OEMs
120
PV Sales Development by Market Cluster 2010-17e
40
IS &
CONNECTIVITY
LV Sales Development by Market Cluster* 2010-17e
Light Vehicles (LV)
■ Light Vehicles includes both passenger vehicles and light
commercial vehicles with at least four wheels, used for the
transport of passengers and/or used for the carriage of goods.
Passenger Vehicles (PV)
■ Motor vehicles with at least four wheels, used for the transport of
passengers, and comprising no more than eight seats, in addition to
the driver's seat.
Light commercial vehicles (LCV)
■ Motor vehicles with at least four wheels, used for the carriage of
goods. This limit depends on national and professional definitions
and varies between 3.5 tons and 7 tons.
50
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
VALUE CHAIN
14.0
14
12.9
15.1
3.7
11.1
11.5
11.4
11.9
2.8
2.9
3.4
3.3
3.2
6.7
6.7
8.0
9.6
6.6
7.3
8.8
6.7
1.5
1.6
1.4
1.3
1.3
1.5
1.6
1.7
2010
2011
2012
2013
2014
2015
2016
2017
12
11.1
10
3.4
3.6
8
6
4
2
0
TRIAD
BRIC
RoW
*Note: Vehicles unidentified are included in LV sales, however excluded from PV and LCV sales.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
20
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
AUTOM OTIVE
OEMs – Key Trends
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
KEY TRENDS
Region
Mobility
Supplier
Overcapacity
Urbanisation
Solutions
Performance
Connected Car
Fuel Efficiency/emobility
Market
Growth
Consolidation
JV’s/M&A
Western
Europe
US
Japan
Brazil
Russia
India
China
very
distinctive
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
not
21
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
Tier ‘0.5’ – Overview
AUTOMOTIVE
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
Shifting Responsibilities in Automotive Value Chain
IS &
CONNECTIVITY
TIER ‚0.5‘
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
NEWCOMER
OEMs
WEB 2.0 BROKER
Prominent Examples of Contract Manufacturing
■ Trend is shifting toward greater reliance of automotive OEMs on tier 1
contractors for development and supply of critical components or even
completely outsourced model lines.
■ Porsche has been outsourcing its 987 Boxster and Cayman manufacturing
to Finland-based contract manufacturer Valmet Automotive since 1997.
As this contract will end in 2011, Magna Steyr will step in to produce Boxster
/ Cayman sports cars in Austria, as of 2012.
■ Over the past 15 years, more OEMs have undertaken contract
manufacturing, as they have come under increasing pressure to develop
new vehicles, particularly due to consumer preference for more distinctive
models and in response to uncertainties in market conditions .
■ California electric car start-up Fisker Automotive has also contracted
Valmet Automotive to assemble its Karma plug-in hybrid sports sedan in
Finland.
■ Tier ‘0.5’ suppliers are those suppliers who, besides providing modules for
vehicles, have complete vehicle design and development capabilities,
including vehicle production (contract manufacturing), such as Magna
International, Valmet Automotive, Karmann and Pininfarina.
■ Electric vehicle ‘Eva,’ developed in-house at Valmet Automotive,
demonstrates that contract manufacturers are striving for independent
vehicle development, engineering and manufacturing.
■ Pininfarina, a leader in the production of niche vehicles, produces for
Alpha Romeo (Spider), Ferrari (458 Italia) and Maserati (GranCabrio).
Suppliers Move up Automotive Value Chain
“49 percent of 200 leading
automotive executives
believe that the future
automotive value chain
responsibilities will change
significantly.”
Integration
competence
(supplies
complex and
critical
vehicle
systems
12%
2010
Tier
3
Tier
2
2015+
Tier
3
Tier
2
49%
39%
Yes
Source: KPMG‘s Global Automotive Executive Survey 2011
No
Don' t know
Process or cost
leadership
(supplies parts
and raw materials)
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Technology
leadership
(supplies subsystems and
modules)
Vehicle integration
competence
(capable of
assembling and
manufacturing
entire vehicle)
Tier
1
Tier
1
OEM
Tier ‘0.5’
OEM
Vehicle integration
competence (capable
of assembling and
manufacturing entire
vehicle)
22
FINANCIAL SERVICE PROVIDER
Newcomer OEMs – Overview
CONVENTIONAL DEALER
AUTOMOTIVE
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Technological Changes Open up Promising Opportunities for Newcomers
What will disappear?
■ Combustion engine parts, including the
engine block, pistons, gaskets, valves,
camshaft, oil pump, oil filter and injection
systems
■ Exhaust system
■ Tank system
■ Clutch
■ Peripheral systems such as oil pumps,
turbochargers and alternators
What will change?
■
■
■
■
■
■
■
Gearbox
Wheel suspension
Power transmission
Air condition systems
Cooling water pump
Thermal insulation
Chassis
What will be added?
■ Electric engine and related powertrain
systems
■ Battery systems, including power electronics,
battery management, charging devices (Plugin) and DC / AC converter
Electrical engine: Powertrain with ca. 210
individual parts and 14 mechanical parts
Combustion engine (six cylinders): Powertrain
with ca. 1,400 individual parts and 140
mechanical parts
Reduction in Complexity
■ Less complexity could mean
that supplier fragmentation will
decrease (less need for a high
number of specialists). This
could increase profit margins
overall.
■ Mature technology with high entry barriers
■ Newcomers must close experience gaps
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
■ With a young technology, all market participants start at the
same level, and face similar challenges.
■ Newcomers have the same or better chances to succeed.
23
FINANCIAL SERVICE PROVIDER
Newcomer OEMs – Current Examples
CONVENTIONAL DEALER
AUTOMOTIVE
NEW COMPONENTS
SUPPLIER
Tesla Motors (Premium Electric Sports Cars)
■ Tesla Motors produces a high-performance electric sports
car, and is backed by a number of high-profile investors.
■ In May 2012, introduced all new model S with improved
efficiency and range.
■ In Dec 2012, reported an annual sale of US$385.7 million,
an increase from US$148.6 million for the year ended Dec
2011.
■ In October 2013, announced the opening of the West
Coast Supercharger Corridor, energizing a network of
stations that enable Model S owners to travel for free
between San Diego, California and Vancouver, British
Columbia.
■ In October 2013, announced alliance with Panasonic to
expand supply of automotive-grade battery cells.
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
VALUE CHAIN
IS &
CONNECTIVITY
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
SABA (Electric Sports Car)
■ SABA Motors is a Silicon Valley Startup company developing high
performance electric vehicles similar to Telsa Motor’s electric sports car.
■ The company promises to offer two-seat electric roadster that accelerates to
60 mph in five seconds and reaches a top speed of 105 mph
■ The car offers driving range between120 and 140 miles per charge.
Source: CNBC
Source: CNBC
Wheego Electric – The Life
BYD (Build Your Dreams)
■ BYD is a 15-year-old Hong Kong-listed battery maker that started producing
BYD-branded electric cars, using its own batteries.
■ MidAmerican Energy, a unit of billionaire investor Warren Buffett's Berkshire
Hathaway, surprised financial markets in 2008, with an agreement to
purchase 10 percent of since then little-known BYD for USD 230 million.
■ BYD is working on launching its first plug-in all electric car, the E6, however,
the time-frame is unknown.
■ Formed as a spin out from Rough and Tuff Electric Vehicles, headquartered
in Atlanta, Georgia produced smart car called ‘The Life’ lookalike of electric
car.
■ The Life is a two-seater car priced at US$32,995, with driving range of 100
miles.
■ The car is small in size reaching 65 mph top speed and is relatively highly
priced compared to similar cars
Source: Company website
Source: CNBC
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
24
KPMG’s view on impending changes in automotive value chain
CONVENTIONAL DEALER
AUTOMOTIVE
VALUE CHAIN
CAR RENTAL AND
FLEET PROVIDER
NEW COMPONENTS
SUPPLIER
IS AND
CONNECTIVITY
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Captive / independent dealerships
■ Showroom-bound vehicle marketing and
sales
TRADITIONAL
PLAYERS
■ Vehicle maintenance services
Auto Rental and (Non-)Captive
Financial Services Companies
■ Long-/short-term auto rental services
■ Leasing, financing and fleet management
Mobility Service Providers
■ Intra-urban car sharing / club schemes or
intermodal mobility solutions
NEW
PLAYERS
■ Can be provided by OEMs, car-rentals,
utilities, infrastructure providers, public
transport companies or new entrants
Web 2.0 Brokers / Intermediaries
■ Vehicle brokerage via online distribution
channels
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
25
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
AUTOMOTIVE
Conventional Dealers – Overview
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Key Trends at Global Level
Key Trend
Priority
Comment
Emergence of
Establishing
Market
Establishing markets such as China will reach higher
levels of market maturity quicker than existing
established markets.
Customer
Relationship
Management (CRM)
Auto dealers are increasingly using CRM software or
online solutions to manage / optimize their marketing
activities, sales processes customer satisfaction and
retention, and service department functions.
After-sales
Support
After-sales support is one of the core focus areas for
dealers, particularly in the Triad.
Used Car
Business
Post the financial crisis, sales volume of used cars has
been increasing and is expected to increase further in
major markets.
Multibrand Dealers
Dealers moving toward multibrand representation as
single brand dealers are faced with profitability issues.
Dealer Market Segmentation
Dealer
Groups
Independent
Dealer
OEM Captive
Used Car
Multi-Brand
Dealerships
Dealerships
Dealerships
End Customer
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
26
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
AUTOMOTIVE
Conventional Dealers – Retail Market Overview
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Car Parc Size and Density – Top 10 automotive market
Country
Car Parc
Size 2000
(millions)
China
US
India
Brazil
Japan
Russia
Germany
UK
France
Italy
Car Parc
Size 2010
(millions)
Car Parc
Size 2020
(millions)
Car Ownership
rate 2000 (in
percent)
Car Ownership
rate 2010 (in
percent)
Car Ownership
rate 2020 (in
percent)
6
211
6
14
52
20
46
226
17
22
58
34
200
262
57
38
59
53
1
96
1
11
50
17
3
95
2
17
57
28
16
99
5
22
61
46
44
42
45
63
62
69
28
33
28
31
37
31
34
38
34
60
69
60
64
75
64
66
79
67
Key Difference – Mature and Establishing Retail Market
Matured market
Establishing markets
New car sales are often stable or even declining in yearon-year and replacement car demand comfortably
exceeds demand for first cars
New car sales growth rate over the last 10 years is
often double digit and first car demand considerably
exceed replacement-car demand
Used-to-New car sales ratio is between 1:1 and 3:1
Vehicle ownership rate is usually above 50
percent
Over 90 percent of all vehicle purchases are
financed
The total number of dealerships is constantly
decreasing, due to competition and low profits.
Used-to-New car sales ratio is often below 1:1,
depending on the new car sales growth
Vehicle ownership rate is usually below 50
Percent
Most car buyers pay for their vehicles in cash
The number of dealerships is constantly rising to
satisfy steadily increasing demand.
Source: KPMG Global Automotive Retail Market Study
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
27
FINANCIAL SERVICE PROVIDER
Mobility Service Providers – Overview
CONVENTIONAL DEALER
AUTOMOTIVE
ORIGINAL EQUIPMENT
MANUFACTURER
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Growing Trend Toward Integrated Mobility Services / Solutions
Usage
Intermodal
mobility
services (car +
pub. transport)
Carsharing,
car rental, fullserviceleasing
Vehicle
Car purchase + financing or
added value
leasing
services (e.g.
insurance)
Ownership
partially integrated
mobility services
integrated
mobility services
Comprehensive
mobility solutions
Parameters for Mobility Concepts
Finance & Insurance
Telematics
Mobility & Energy
Technical Services
Vehicle financial services
■ Credit
■ Leasing
■ Buy-back
Remote controls (EVs)
■ Remote battery monitoring
■ Remote control (HVAC, charging process, etc.)
Mobility
■ Multimodal mobility access
■ ICE car loan (“switching”) for EVs
Assistance
■ Roadside assistance
■ Localized assistance
Battery financial services (EVs)
■ Credit
■ Leasing
■ Buy-back
Navigation
■ Real-time traffic info
■ Points of interest
■ Eco-routing
■ Reachable destinations
Energy / fuel
■ Energy supply for Evs
■ Fuel for ICEs
Warranty
■ Warranty
■ Warranty extension on EV and battery
Insurance
■ Vehicle insurance
■ Insurance on financing
Entertainment
■ Connection to external devices
■ Embedded apps (Internet, video, etc.)
Charging (EVs)
■ Infrastructure installation
■ Access to fast-charging networks
Maintenance
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
■
■
■
■
Battery maintenance
EV maintenance
Battery replacement
Remote maintenance
28
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
AUTOMOTIVE
Web 2.0 Brokers – Overview
SUPPLIER
VALUE CHAIN
NEW COMPONENTS
SUPPLIER
IS &
CONNECTIVITY
ORIGINAL EQUIPMENT
MANUFACTURER
TIER ‚0.5‘
NEWCOMER
OEMs
CAR RENTAL &
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Emergence of Virtual Sales Channel
WEB 2.0 Automotive Brokers
Automotive
Information
Brokers
Companies that offer online
information, pricing and a broker
service to bring together potential
buyers and sellers, but do not offer
any additional services. They are
purely infomediaries.
Automotive
Service
Brokers
Companies that offer online
information, pricing and online
quoting as well as additional
services, such as financing,
insurance, and a direct link to
car dealers.
Advantages of Online Auto Brokerage for Customers
■ More and better information is provided, such as vehicle reports by
independent consumer associations and interest groups, direct product
and service comparison.
■ A more comprehensive coverage of the market reduces the risk of
customers overpaying. A web-based intermediary will immediately be
able to tap a vast reservoir of potential buyers / sellers, and may thus
realize substantial economies of scale in information provision.
■ It is easy to link with providers of value-added mobility services such
as car insurance, finance, car pooling and maintenance centers.
■ The wealth of information on the web is complemented by traditional
services; for example, some websites offer home delivery of new cars.
Source: Cybermediation in Auto Distribution: Channel Dynamics and Conflicts
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
29
KPMG’s view on impending changes in automotive value chain
Summary
FINANCIAL SERVICE PROVIDER
CONVENTIONAL DEALER
AUTOMOTIVE
VALUE CHAIN
SUPPLIER
NEW COMPONENTS
SUPPLIER
TRADITIONAL
PLAYERS
IS AND
CONNECTIVITY
TIER '0.5'
NEWCOMER
OEMs
CAR RENTAL AND
FLEET PROVIDER
MOBILITY SERVICE PROVIDER
WEB 2.0 BROKER
Tier 1 Suppliers
Original Equipment Manufacturers
Captive / independent dealerships
■ Vehicle and engine module / system
manufacturing
■ Vehicle and engine design,
manufacturing, and assembly
■ Showroom-bound vehicle marketing and
sales
Tier 2 Suppliers
■ Brand management
■ Vehicle maintenance services
■ Automotive parts manufacturing
(suspension, steering and driveline)
■ Several OEMs vertically integrate e-car
value chain steps, from battery
manufacturing to e-motor production
Auto Rental and (Non-)Captive
Financial Services Companies
Tier 3 Suppliers
■ Automotive parts manufacturing and raw
material processing
Electric Components and Light
Weight Materials Suppliers
NEW
PLAYERS
ORIGINAL EQUIPMENT
MANUFACTURER
■ Batteries, e-motors, power electronics
and semi-conducters
■ Carbon-fiber chassis and auto parts
Information Systems and Connectivity
Companies
■ Telematics, wireless communication,
infotainment, and mobile payment
■ Supplier, dealer and customer financing
via captive financial service arms
■ Long-/short-term auto rental services
Newcomer OEMs
Mobility Service Providers
■ Immature e-technologies and relatively
low complexity allow newcomers to
compete with established players
■ Intra-urban car sharing / club schemes or
intermodal mobility solutions
■ Leasing, financing and fleet management
Tier ‘0.5’ Suppliers
■ Can be provided by OEMs, car-rentals,
utilities, infrastructure providers, public
transport companies or new entrants
■ Tier 1 suppliers upgrade to contract
manufacturers
Web 2.0 Brokers / Intermediaries
■ Complete car design and development
capabilities, including production
■ Vehicle brokerage via online distribution
channels
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
30
Global Economic and Automotive trends & developments
Agenda
1. Global, African & South African Economy
2. Global Automotive trends & developments
3. KPMG Global Automotive Executive Survey 2014
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
31
KPMG’s Global Automotive Executive Survey 2014
About the study
About the study
Geographic distribution of respondents
Respondents job titles
Company category
Company annual revenues
■ KPMG International’s annual
assessment of the current
state and future prospects
of the worldwide automotive
industry.
■ In this year’s survey 200
senior executives from the
world’s leading automotive
companies were
interviewed.
Source: KPMG's Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
32
Key automotive trends up to 2025
STANDARDIZATION
Increasing use of platforms and
standardization of modules
EMERGING MARKETS
Market growth in
emerging markets
78%
85%
ICE OPTIMIZATION
Downsizing and optimization of the
internal combustion engine (ICE)
76%
FUEL CELL E-MOBILITY
69%
SELF-DRIVING CARS
MOBILITY
Mobility-as-a-service
EUROPEAN PRODUCTION
Rationalization of production in
Europe and shifting of production
to emerging markets
61%
14%
49%
59%
49%
CONNECTIVITY
Connected car technologies
(e.g. car-to-x communication)
The industry
continues to be
shaped by
emerging markets.
57%
59%
URBAN VEHICLE
Innovative urban vehicle
design concepts
BATTERY E-MOBILITY
FINANCE & LEASING
OEM captive
financing and leasing
There is a sharp
decline in the
importance of pure
battery e-mobility
as automakers
continue to turn
their attention to
improving ICE
efficiency.
Note: Percentage of respondents that rated a trend as ‘extremely important’ or ‘very important’
Source: KPMG's Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
33
Markets and consumers - the bigger picture:
Consumers choose economy over innovation
Factors influencing consumer’s purchase decision
92%
79%
79%
74%
73%
Fuel efficiency
Safety innovation
Ergonomics and
comfort
Vehicle styling/
exterior
Environmental
friendliness
70%
69%
65%
53%
47%
Enhanced vehicle
lifespan
Plug-in solutions
Vehicle-bound
internet
connectivity and
built-in
technologies
Telematics/
personal
assistance
services
Use of alternative
fuel technologies
Consumers have
to choose
between their
conscience,
their wallet and
their status.
Connected car
solutions are
gaining
importance yearon-year.
Percentage of respondents that rated issues as ‘extremely important’ or ‘very important’
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
34
Evolving strategies for market success
Ranking
2014
Ranking
2013
Business strategy
Percentage
1
3
Organic growth
84%
2
2
Expansion of the value chain and
diversification
77%
3
1
Corporate partnerships
(JVs and partnerships)
77%
4
6
Cooperation with players from converging
industries
76%
5
4
Outsourcing of (non-)core activities
55%
6
5
Mergers and acquisitions
50%
Automakers are
refocusing from
joint ventures
and partnerships
towards
independent
growth.
Note: Percentage of respondents that rated the strategy as ‘extremely important’ or ‘very important’
Source: KPMG’s Global Automotive Executive Survey 2014.
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
35
Thank you
Presentation by:
Gavin Maile
Director
+27 83 253 7165
gavin.maile@kpmg.co.za
© 2014 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International.
KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does
KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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