Analysis of Platform Strategies of Major Heavy-Duty Truck Manufacturers


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Analysis of Platform Strategies of Major Heavy-Duty Truck Manufacturers

  1. 1. Analysis of Platform Strategies of Major Heavy-duty Truck Manufacturers Nearly One in Three Heavy-duty Trucks Manufactured in 2018 to Feature Platform Based Lineage Ananth Srinivasan, Senior Research Analyst Sandeep Kar, Global Director Commercial Vehicle Research 27Nov, 2012© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. Today’s Presenters Sandeep Kar Ananth Srinivasan Global Director Senior Research Analyst Commercial Vehicle Research Commercial Vehicle Research Frost & Sullivan Frost & Sullivan 10 years of global commercial vehicle technologies Experience base covers a wide range of sectors, and markets expertise, which include particular leveraging long-standing working relationships with focus on areas such as: leading industry participants’ senior executives • Functional expertise • Global commercial vehicle industry growth • Commercial vehicles opportunities, and market penetration and • Transmission systems growth strategy development • Safety systems • Advanced truck technologies- powertrain, • Comfort and Convenience chassis, safety, telematics and regulation technologies compliance technologies • Business expertise • Global research and consulting management, • Competitive analysis global business development and team- • Product portfolio, and market expansion building, CXO level revenue and market share strategy growth strategy development • Go-to-market strategy Source: Frost & Sullivan analysis.. NA53-18 2
  3. 3. Why Know About This Today?Competitive Dynamics, Demand Shift in Favour Emerging Markets; Converging Preferencesand Regulations Emerge as Key Trends 4 1 9.5% Indian TRIAD and2018 27.3% 63.2% TRIAD OEMs Chinese looking to participa BRIC 1. Changing Competitive enter Environment nts going RoW emerging global2010 27.6% 63.8% markets 8.6% 0.0% 50.0% 100.0% Unit Production 4. Saturated demand in 2. Convergence of Globalization is not an legislative and TRIAD, option anymore; it is a environmental regulations significant opportunities in across regions BRIC necessity. 2 2008 TCO Region NOx Particulate 3 (g/kWh) (g/kWh) 2015-e 10 Product North 0.27 0.013 Service/ Quality 5 America Networking 3. Customer preferences EU 0.4 0.01 0 focused towards optimizing TCO Japan 0.4 0.01 Duty Cycle Comfort and Applicability Convenience India 3.5 0.02 China 2 0.02 Regulatory Compliance Source: Frost & Sullivan analysis. NA53-18 3
  4. 4. Current Industry ScenarioOEMs’ Desire to Move to Sustainable Profitability Zone with Regional Customization Flexibilitiesand Synergy Across Different Regional Brands Heavy-duty Truck Market: Impact of Platform Strategy on Long- Globalization versus Profitability, Global, 2011 term Global product Profitability Zone Vertical synergy platforms with multi- Sustained Impact of Strategy on Profitability between brands and regional branding within across segments each segment Common R&D, strong Regional presence/ regional brands/partners, Global service partners, localized multiple product platforms and distribution product development network Daimler Group, Volvo Group, Scania AB ,IVECO, MAN SE Dongfeng Motor Corp, Ashok Navistar Inc, PACCAR Leyland Inc, CNHTC, Beiqi Foton, TATA Motors Short- term Medium High Very High Impact of Strategy on Globalization Current Industry Trend F&S Analysis and Recommendation Expected Industry Movement Source: Frost & Sullivan analysis. NA53-18 4
  5. 5. Platform Strategy—Five Key Takeaways There is no standard definition of platform in the global HD market Platform-based production of 12 key global OEMs expected to more than double by 1 2018, contributing on average 30.0 percent of respective OEMs annual production volumes. Daimler, Volvo, MAN SE to emerge as global leaders in terms of platform-based 2 truck production and gain market penetration across different regions. Scania AB will continue to be the industry pioneer in modularization. Five BRIC-specific, global, platform-based models to be launched by 2016, and an 3 estimated 50.0 percent of total platform-based production to be in China and India. Source: Frost & Sullivan analysis. BRIC OEMs to focus on MoU/JV/ relationships with EU/NA OEMs and major Tier-I 4 suppliers. India, China offer high OEM−supplier synergy opportunities in terms of engine, transmission, advanced safety, electronics, and chassis technologies. Industry moving toward consolidation of regional, brand-specific platforms into global, 5 multi-brand platforms. EU OEMs to emerge as leaders in terms of both technology adoption and market penetration. NA53-18 5
  6. 6. Definitions and Key Assumptions A vehicle architecture can be defined as “the overall framework of a vehicle, which includes its chassis, suspension, engine, transmissions, cab and other systems. This essentially translates into the DNA of the vehicle and is responsible for the holistic performance characteristics of the vehicle.” Example: Cab-Over-Engine architecture A platform can be defined as “a single set of common design, engineering, Architecture and manufacturing elements shared between different products/ brands/ Platform marquee within the same organization or between organizations.” Example: Howo A7 platform from CNHTC Module System A module can be defined as “a set of functional systems/subsystems that can be integrated into the vehicle platform to perform a set of functions.” Example : Human−machine interfacing module A system is “a combination of individual components integrated to perform a Component specific function.” A system can be tested for its performance characteristics with respect to the vehicle’s requirements. Example: Anti-lock braking system A component is “an individual part that forms the elementary building block of a functional system.” Example: Crankshaft Source: Frost & Sullivan analysis. NA53-18 6
  7. 7. By 2018, 29 Global HD Truck Platforms are Expected, with Individual Regional Products Built with up to 70% Localized Components OEMs whose global strategy was in early stages of execution in 2011 are expected to show more pronounced, platform-based product development as they expand geographically. 70 Heavy-duty Truck Market: Key Truck Platforms, Global, 2011 and 2018 58 57 Beiqi Foton 60 Dongfeng Motor Corp.Number of Platforms (Units) 50 CNHTC Ashok Leyland 40 TATA Motors 29 24 Navistar Inc. 30 PACCAR Inc. 20 IVECO Scania AB 10 MAN SE Volvo Group 0 Observed no. of distinct Estimated no. of global Observed no. of distinct Estimated no. of global Daimler Group platforms, 2011 platforms available, platforms, 2018 platforms available, 2011 Year 2018Note: Within the split Auman GTL, and MAN SITRAK platforms are accounted toboth individual OEMs involved, but are counted only once for computing the total. Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis. NA53-18 7
  8. 8. Over 50.0 percent of Top 12 Global OEMs Expected to Increase Number of Global Platformsby 2018; Asia Market Penetration Emerging as Key Strategic Rationale behind the Increase Heavy-duty Truck Market: Key Truck Platforms, Global, 2011 Expected to Expected to stay at Observed no. of distinct platforms, 2011 Increase by 2018 current level Estimated no. of global platforms available, 2011 Key Global Truck and Associated Number of platforms (Units) OEM Group 0 5 10 Platforms Considered Actros, Axor, Auman GTL (Foton-Daimler Daimler Group Daimler Group 7 JV), BharatBenz 4 Volvo Group Volvo FM, FH, VE (Eicher-Volvo JV) Volvo Group 8 3 TGM, SITRAK (CNHTC-MAN JV), CLA MAN SE MAN SE 6 (MAN-Force JV) 3 3 Scania AB R, P, G series Scania AB 3 2 IVECO Stralis OEM IVECO 1 7 PACCAR Inc. XF, LF (DAF Trucks N.V.) PACCAR Inc. 2 9800, CT series (CAT-NC2partnership), 6 Navistar Inc. Navistar Inc. 3 MN (Mahindra Navistar brand) TATA Motors 6 TATA Motors Prima, Novus 2 Ashok Leyland 4 Ashok Leyland U series 1 CNHTC 5 CNHTC Howo A7, SITRAK (CNHTC-MAN JV) 2 Dongfeng MotorDongfeng Motor Corp. 3 Tianlong 1 Corp. Beiqi Foton 3 Beiqi Foton Auman GTL 1 Source: Frost & Sullivan analysis. NA53-18 8
  9. 9. Leading OEMs Expected to Consolidate Regional Platforms and Launch New Multi-national Platforms, Thereby Increasing the Number of Global Platforms Going Forward Heavy-duty Truck Market: Key Truck Platforms by OEM, Global, 2011 and 2018 9 Average no. of distinct platforms, 2011 Average no. of global platforms, 2011 8 Observed no. of distinct platforms, 2011 8 Estimated no. of global platforms available, 2011 7 Observed no. of distinct platforms, 2018 7 7 7 7 7 Estimated no. of global platforms available, 2018 6Number of platforms (Units) 6 6 6 6 5 5.0 5 5 5 5 5 4 4 4 4 4 4 3 3 3 3 3 333 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 1 2.2 1 1 1 1 1 0 Daimler Volvo MAN SE Scania AB IVECO PACCAR Navistar TATA Ashok CNHTC Dongfeng Beiqi Foton Group Group Inc. Inc. Motors Leyland Motor Corp. OEM Source: Frost & Sullivan analysis. NA53-18 9
  10. 10. Platform Strategy Outlook—Key Global OEMsWeighted Average Number of Global Platforms of Leading OEMs is Expected to Grow from2.1 in 2011 to 2.6 in 2018 Heavy-duty Truck Market: Comparative Outlook of Key Platforms, Global, 2011 and 2018 Region Daimler Group Volvo Group MAN SE Scania AB Outlook 2018 Daimler: E,T,A,C-B,S,EL Actros, Volvo: E,T,A,C-B,S,EL EU FM, FH TGM R, P, G Axor MAN SE: E,T,A,C-B,S,EL Scania: E,T,A,C-B,S,EL Daimler: E,A,EL Volvo: E, EL, S, A NA MAN SE:--- Scania: --- Daimler: E,T*,A,C-B,EL Volvo: E,EL,T*,C-B,S India BharatB VE CLA MAN SE: E,A,EL,C-B enz Scania: E,T,C-B,EL,S Daimler: E,T*, EL Volvo: E, T*, EL, C-B China Auman SITRAK MAN SE: E, EL,C-B, A GTL Scania: E,T,C-B,EL,S Daimler: E,C-B,EL,S Volvo: E,T*,EL RoW MAN SE: E,C-B,EL Scania: E,T,C-B,EL,SScenario, E, T, S, EL E, T, EL, E, A, C-B E,T,C-B,EL,S2011 E: Engine, T: Transmissions, A: Axles, C-B: Cab and body, S: Safety, EL: Electronics Legend: 2011 2018 T* : Indicative of variation in technology/module sharing w.r.t other regions Source: Frost & Sullivan analysis. NA53-18 10
  11. 11. Platform Strategy Outlook—Key Global OEMs (continued)Weighted Average Number of Global Platforms of Leading OEMs is Expected to Grow from2.1 in 2011 to 2.6 in 2018 Heavy-duty Truck Market: Comparative Outlook of Key Platforms, Global, 2011 and 2018 Region IVECO Navistar Inc. TATA Motors CNHTC Outlook 2018 IVECO: E, T, EL TATA: E,T, C-B,EL, S EU Stralis CNHTC: E,T,C-B, EL,A Navistar Inc., : E,T,C-B,EL NA TATA Motors: E,T,A,C-B,EL,S Navistar Inc., : E, T, C-B India MN Prima SITRAK IVECO:E, T, EL, S Navistar Inc.,: E,C-B,EL,S China CT Genlyon CNHTC: E,T,A,C-B,S,EL HowoA7 IVECO: E,T, EL Navistar Inc.,: E,T,A,C-B,EL,S RoW 9800 TATA Motors: E,T,A, C-B,EL,S CNHTC: E,T,C-B,A,S,EL Scenario, E E E,T,A E,T,C-B,EL 2011Legend: E: Engine, T: Transmissions, A: Axles, C-B: Cab and body, S: Safety, EL: Electronics 2011 2018 Source: Frost & Sullivan analysis. NA53-18 11
  12. 12. By 2018, Platform-based Production to Account for More than One Third of Total ProductionVolume of Key Global OEMs • Platform-based production of key models (global and regional) expected to constitute 38.0 percent of total truck production by 2018 • Major contributors to this increase will be growth in India- and China-specific products, harmonization and sharing of technology platforms by European OEMs, and synergies emerging from joint ventures and mergers in the industry. This is expected to lead towards vertical integration for EU and NA OEMs and supplier dependencies for BRIC OEMs Heavy-duty Truck Market: Platform-based Production Snapshot, Global, 2011 and 2018 Criteria 2011 Scenario 2018 Scenario Global platform-based models with more than 40K 3 7 units production No. of OEMs exceeding 40K units production across different regions (all models 4 8 inclusive) Share of global platforms to 12.0 Platform-based production 16.0 total production (all OEMs % 14.0  global models % inclusive) % 22.0 74.0 Platform-based production 62.0 % %  regional models % Non-platform-based production Source: Frost & Sullivan analysis. NA53-18 12
  13. 13. Modular Production System—Scania AB Case StudyStandardized Interfaces with Flexibility across Various Model Configurations Enable Scania AB to ModularizeAll Major Component Subsystems Doors, side walls, and few combination of • Standardized components compose the three cab families interfaces across Heavy-duty Truck Market: Scania Cab product models Family Modularization Snapshot, 2011 • Maximum flexibility, P, G, R Number of Before After since parts fit together series cab Sheet metal 1400~1450 350~400 independent of model components variations Interiors 1750~1800 580~620 Cab – top 7 3 Strategy Execution Cab – front 8 3 Cab – door 12 8 Windscreen 3 1 Problem Results • Estimated 50.0 percent model- focused part reduction achieved • 30.0−50.0 percent reduction in • Dynamic customer preferences, leading design and development cost estimated to high manufacturing costs • Increasing inventory, and bill-of- • 10.0 percent manufacturing cost materials on product portfolio expansion, reduction, and 30.0 percent reduction in sales and service resulting in high operational costs expenses Source: Scania and Frost & Sullivan analysis. NA53-18 13
  14. 14. Comparative Analysis—Key Global OEMsParameters Representative of Global Platform Strategy and Future Outlook Heavy-duty Truck Market: Comparative Analysis of HD Truck Platforms by Key OEMs, Global, 2011 Parameter Daimler Volvo MAN SE Scania AB Navistar Inc. TATA CNHTC Group Group Motors Note: Information and ratings are based on Frost & Sullivan analysis.No. of global 4 3 3 3 3 2 2platforms 2011Platform Actros,Axor, FM, FH, VE TGM, SITRAK, R, P, G series MN, CT series Prima, Novus SITRAK,description Auman GTL, CLA HowoA7 BharatBenzPlatform hub Europe, China, Europe, India Europe, China, Europe India, North India, South China(production) India India America, Latin Korea AmericaTarget market Europe, South Europe, South Europe, Asia Europe, South India, Asia India, Asia China, Asia America, Asia America, Asia Pacific, Latin America, China, Pacific, Pacific, Middle Pacific, South Assumptions listed in the following slide.(sales)* Pacific Pacific America India Americas East, Africa AmericaApprox. % of 35.0−40.0 30.0−40.0 25.0−30.0 55.0−60.0 20.0−25.0 30.0−40.0 10.0−15.0common systemsacross regions,2011Approx. % of 50.0−55.0 50.0−55.0 45.0−50.0 65.0−70.0 37.0−43.0 35.0−40.0 30.0−35.0common systemsacross regions,2018No. of global 4 3 4 3 3 2 2platforms 2018F&S success 4.4 4.2 4.2 4.0 3.6 3.3 3.6potential rating ofplatform 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Source: Frost & Sullivan analysis. NA53-18 14
  15. 15. Comparative Analysis—Key Global OEMs (continued)Parameters Representative of Global Platform Strategy and Future Outlook Heavy-duty Truck Market: Comparative Analysis of HD Truck Platforms by Key OEMs, Global, 2011 Parameter Daimler Volvo MAN SE Scania AB Navistar TATA CNHTC Group Group Inc. Motors Emission Euro 6, EPA EEV, EPA Euro 6, EPA Euro6 EPA 2010, Euro 4, Euro 5 Euro 4 compliance 2010 2010 2010 Euro 4 protected (best) Base AMT for EU, AMT for EU, AMT for EU, AMT and AT Manual Manual Manual, AMT transmission type Manual for Manual for Manual for India and India India and China China Supplier 3.9 3.7 4 3.2 4.1 4.4 4.2 opportunity index 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5Note:• Only key global OEMs listed based on Frost & Sullivan assumptions.• Frost & Sullivan proprietary list of key factors and attributes considered for analysis of data.• Indices are representative and are for comparative purposes only.• Indices on scale of 1 to 5, with 1 being lowest, 5 being highest.• * is indicative of only the key target markets for sales of the respective model. Source: Frost & Sullivan analysis. NA53-18 15
  16. 16. Outlook for 2018Participants with Global Platform Portfolio, Strong Presence in Growth Markets, and RegionalBranding Expected to Sustain Profits Globally Heavy-duty Truck Market: OEM Outlook Comparative Analysis, Global, 2018 Size of bubble represents expected production volume attributable to platform-based HD truck models by 2018 10 Clear global strategy, Global strategy evolving, strong product mix Sought-after strong regional products 9 zone Volvo Group 8 Daimler Sustained Group Overall Global Presence Index Navistar MAN SE profits, 7 globally Inc. 6 IVECO Beiqi Scania 5 Foton AB Profitable, 4 PACCAR Inc. only at TATA Motors regional level 3 Ashok Leyland Dongfeng CNHTC 2 Motor 1 Corp. 0 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Expected Number of Global Platforms Available, 2011 Source: Frost & Sullivan analysis. NA53-18 16
  17. 17. ContentsSection Slide Number Executive Summary 4 Research Objective, Scope, Methodology and Background 25 Definitions and Segmentation 32 Vehicle Platform—Introduction 39 Megatrends and Industry Convergence Implications 50 Market Dynamics—Global Heavy-duty Truck Market 53 Industry Forecasts 63 Platform Strategies of Major Global HCV OEMs 77 Comparative Analysis of Platform Strategy, Global Footprint, and Penetration 120 Potential of Major Global HCV OEMs Impact of OEMs’ Platform Strategy on Supplier Community 133 Conclusions and Strategic Recommendations 141 Appendix 151NA53-18 17
  18. 18. Key OEM Groups Compared in this StudyThe OEM groups compared in this study are as follows:Group OEMs Daimler Trucks North America LLC, Daimler AG Commercial Vehicles Europe, Beijing FotonDaimler Group Daimler Automotive Co. Ltd, Daimler India Commercial Vehicles, Mitsubishi Fuso Truck Company Ltd. Volvo Trucks North America, Mack Trucks North America, Volvo Trucks Europe, RenaultVolvo Group Trucks, UD Trucks, Volvo Trucks India, Eicher Volvo Commercial VehiclesMAN SE MAN Truck & Bus Europe, MAN Latin AmericaScania AB Scania AB EuropeIVECO IVECO, SAIC-IVECO Commercial Vehicles ChinaPACCAR Inc. Peterbilt Truck Company, Kenworth Truck Company, DAF Trucks N.VNavistar, Inc. Navistar International, Mahindra Navistar Automotive Ltd.TATA Motors TATA Motors Commercial Vehicle India, TATA Daewoo Commercial VehiclesAshok Leyland Ashok Leyland Trucks IndiaCNHTC China National Heavy Truck CompanyDongfeng Motor Corp. Dongfeng TrucksBeiqi Foton Foton Trucks China Source: Frost & Sullivan analysis. NA53-18 18
  19. 19. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations? Please inform us by “Rating” this presentation.Other? Source: Frost & Sullivan analysis. NA53-18 19
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  21. 21. For Additional InformationJeannette Garcia Ananth S.Corporate Communications Senior Research Analyst,Automotive & Transportation Automotive & Transportation(210) 477-8427 (9144) ananths@frost.comSandeep KarResearch Director, CommercialVehiclesAutomotive & Transportation(001) Source: Frost & Sullivan analysis. NA53-18 21