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Etude PwC Autofacts production mondiale (mai 2014)

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PwC Autofacts revoit son estimation de hausse de la production automobile mondiale pour 2014 à 4,8%, avec 86,8 millions de véhicules légers assemblés. Les cinq grands marchés européens (France, Allemagne, Italie, Espagne, Royaume-Uni) pour la première fois tous en croissance depuis 2009

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Etude PwC Autofacts production mondiale (mai 2014)

  1. 1. Analyst Note> AutofactsR For information regarding our products and services please visit us at www.autofacts.com 1 Autofacts A historically frigid winter in the US, political turmoil in South America and Eastern Europe, and seemingly endless recall announcements around the globe highlight some of the hurdles the industry has encountered to start the year. The good news? Global sales and production are still expected to grow. What else could go wrong? Many US consumers who had to endure the polar vortex this past winter are finally breathing a warm sigh of relief with the start of spring. The near record snowfall experienced across the Midwest and eastern US significantly depressed sales in January and February. Fortunately, a strong March helped get sales back on track and Autofacts is still anticipating a full year sales topline of 16.2m units. Meanwhile, political unrest across several regions emerged during the first quarter of 2014. Civil unrest continues in Venezuela as currency control issues have prompted shortages of basic needs, essentially halting vehicle assembly in the country. It remains unclear when, or if, any assembly will resume. As a result, Autofacts is forecasting a nearly 50% YoY decline in 2014 with a very real possibility of an indefinite suspension of vehicle production. A potentially larger impact on vehicle assembly and sales exists in Eastern Europe as the recent annexation of the Crimean Peninsula by Russia has increased tensions within the region, resulting in economic sanctions with possibly more on the way. While both the length and depth of this development remain largely unclear, it continues to be closely followed by industry participants looking to invest within the growing Russian market. Another major setback in recent months has been the onslaught of vehicle recalls related to a myriad of past and current issues. This is not entirely surprising, as the best time to make a recall is generally when your competitor(s) are as well. The real surprise has been the sheer volume of recalls…almost 12 million to date globally. Despite this and a number of other issues that have arisen during Q1 2014, both consumer and industry confidence remain high. Autofacts is forecasting global light vehicle production to reach ~86.8m units in 2014, a modest 4.8% YoY increase but a sign that the industry will weather the storm – or polar vortex, so to speak. Quarterly Forecast Update A stumble may prevent a fall April 2014 Source: Company Announcements, Autofacts Analysis, Autofacts 2014 Q2 Data Release 4.8% Forecasted increase in YoY global light vehicle assembly for 2014 (82.8m → 86.8m) 104m 2018 global light vehicle assembly forecast, up from 82.8m units in 2013 12m Announced global product recalls during the first quarter of 2014 4.6% Forecasted light vehicle assembly Compound Annual Growth Rate (CAGR) from 2014-2018
  2. 2. 2 Autofacts For information regarding our products and services please visit us at www.autofacts.com Analyst Note Plus China Sales and Assembly Though the Chinese economy grew at 7.7% in 2013, the automotive industry enjoyed more robust growth of 14.1% for light vehicles. The beginning of 2014 has shown a similar rate of growth, but underneath this topline is a definitive shift in consumer preferences, with major gains for both SUVs and MPVs by 53.2% and 23.7% respectively. As the market continues to evolve , catering to dynamic consumer tastes will be a key consideration for automakers going forward. Unfortunately for domestic Chinese brands, this growth has not translated in increased sales or market share. As of February, Chinese brands have collectively suffered six consecutive months of market share losses, shrinking by 4.8% to 38.4% as compared to last year. As Western joint ventures continue to penetrate the market in every segment, from entry level to premium, this trend is expected to continue at the expense of domestic brands. Following the trajectory of 2013, light vehicle assembly has grown 11.9% through the first two months of the year and is expected to continue through the year to meet the seemingly endless appetite for new cars. Autofacts anticipates total light vehicle production will reach 21.4m in 2014, which would be a 10.7% improvement on 2013’s total. One aspect assemblers will need to increasingly consider quality, given recent consumer protection measures that will require more stringent quality checks. Though this will likely have minimal impact on the total volume produced, it may involve an increased level of investment and oversight all along the automotive value chain. India Sales and Assembly The sales malaise experienced in India through 2013 has carried into the first quarter of 2014. The weak Key Statistics (YTD through March) % Change (YoY) China light vehicle sales (through Feb) +11.3% China light vehicle assembly (through Feb) +11.9% India light vehicle sales -10.4% India light vehicle assembly -10.6% rupee, elevated inflation rates, and high fuel costs continue to plague the market, driving transaction costs and total cost of ownership ever higher for potential consumers. Despite the difficult environment, select OEMs, including Honda and Ford, managed to achieve marked growth in the first three months of the year, but at the expense of other established manufacturers. This weakened domestic demand was doubly concerning as exports fell by 0.5% during Q1 in the wake of unfavourable custom duties to key export markets in Europe, Latin America, and Africa. Despite these factors, the overall short to mid-term sales outlook is slightly positive, given the reductions in excise taxes by 4% to 6% in February. Many are also hopeful that, with the upcoming elections in May, a more positive investment and business climate will help drive consumer sentiment up even further. The recent rise in Purchasing Manager Index and general improvement in business sentiment are indicators that optimism is abound, suggesting that an economic recovery could be near for India. Given the anemic demand and reduction in exports from the past year, total light vehicle assembly has, in turn, declined. OEM capacity investments from recent years remains underutilized, hovering in the 55% range for 2014. However, production levels are expected to rise with the anticipated market recovery along with the slew of new products from various automakers. These positive assumptions are the basis of Autofacts’ forecasted increase in light vehicle assembly by 2.2% for 2014. Sales Though the harsh winter weather of January and February slowed down light vehicle sales in the US, March results were resurgent, confirming that the polar vortex was indeed keeping would-be buyers Developing Asia-Pacific China and India Key Statistics (YTD through March) % Change (YoY) US light vehicle sales +2.0% Canada light vehicle sales +0.9% Mexico light vehicle sales (through February) +0.6% North America
  3. 3. 3 Autofacts For information regarding our products and services please visit us at www.autofacts.com Analyst Note Plus from dealer lots. March’s daily sales rate reached nearly 59k units – the highest level seen since 2007. Also helping the continued sales push is record high lease take rates, which reached 29% in Q4 2013. Additionally, a high number of vehicles are expected to come off lease in the 2014, pushing drivers back to the dealership for new lease vehicles. Both Canadian and Mexican sales have come in very closely to expected numbers and our sales forecasts for both regions remain consistent with prior quarters, reaching nearly 1.8m units and 1.2m units, respectively. Assembly In terms of assembly, the US and Mexico are still enjoying a heightened appetite to add capacity. Automakers are increasingly turning towards Mexico, given the low-cost labor and inviting business environment. In fact, Mexico is expected to soon overtake Japan as the top source for imports for the US. In the near term, the North American topline is expected to reach 16.8m units in 2014 across the three markets, with the US accounting for 68% of total assembly volume. Italy, Spain and the UK) achieved growth since the fourth quarter of 2009. The light commercial vehicle (LCV) sector tends to react more strongly to economic developments, suffering harder falls during recession but recovering more rapidly when economic growth resumes, and we are seeing evidence of a rapid recovery in many markets now with an estimated 10% increase in the first quarter. With the positive indicators and developments, the Autofacts forecast calls for a 4% increase in new car registrations in 2014, reaching 12.8m units. Economic growth is expected to pick up the pace while unemployment rates fall, which should translate into a stronger growth rate of 5.3% to reach 13.5m units in 2015. The LCV sector should see a slightly stronger recovery of 6.1% in 2014 and 7.4% in 2015, reaching 1.6m units. Even with the relief of seeing signs of a turnaround after six years of declines in the region, combined light vehicle sales for 2014 will still be ~3m units lower than the peak of 18.2m units registered in 2007. Assembly Export growth has allowed EU production to outperform EU demand in recent years, but we anticipate that the two will be more closely aligned going forward. Strong growth in exports to China, the US, Russia and Turkey, as those markets grew between 2010 and 2012, helped EU assembly stay afloat during the downturn. However, the situation is beginning to shift, with exports to the Russian and Turkish markets falling as those markets contract. In addition, localisation of production, especially in China, Russia and the US, should trigger a slowdown in exports to these markets, with potential decline in the longer term. Autofacts forecast a 4.1% increase in light vehicle assembly to 16.6m units in 2014, followed by a 4.5% increase to 17.4m units in 2015. Though we do not see demand within the EU returning to the 2007 peak levels due to changing demographic factors, declining interest from new consumers and reduction in multiple car ownership, assembly is expected match the 2007 output of 18.8m units by 2017, thanks to the much higher levels of exports. Sales New car registrations in the EU+EFTA started on a good note in 2014, with an estimated growth rate of 10.2% in March alone. While this recovery is calculated from a low basis from Q1 of 2013, the strength of the increase is welcome and suggests a stronger recovery for the remainder of 2014 – more than most observers would have anticipated just three months ago. This healthy Q1 growth was bolstered by strong sales in both the UK and Poland, with other markets beginning to show signs of recovery as well. Greece, Ireland and Portugal, which were three of the core debt crisis markets, saw growth of 17.4%, 26.4% and 40.7% respectively, albeit from rather low bases. Additionally, the first quarter marks the first time that all five of the largest markets in the region(France, Germany, EU+EFTA Key Statistics (YTD through March) % Change (YoY) EU+EFTA new car registrations +8.0% EU+EFTA LCV registrations +10.0% © 2014 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PwC US helps organizations and individuals create the value they’re looking for. We’re a member of the PwC network of firms in 157 countries with more than 184,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/us.
  4. 4. 4 Autofacts For information regarding our products and services please visit us at www.autofacts.com Analyst Note Plus South Korea Sales and Assembly New car sales have held flat around 1.3m units in South Korea the past three years, but the market is finally expected to see a modest increase of 2% in 2014, thanks to positive economic indicators as well as a handful of key new model introductions. Despite this positive news, domestic brands continue to face challenges from import brands which have grown from a 1% share of the market in 2000 to over 14% in 2013. Favorable free trade agreements (FTAs) with both the EU and US have made premium brands more price competitive while making mass market nameplates readily available. These FTAs have also benefitted the market in terms of assembly growth, with total export volumes hovering at the 3m unit mark as Korean brands enjoy increasing popularity on a global scale. However, the formerly cost-effective assembly base in South Korea has been plagued with rising costs, frequent labor strikes, and fluctuating currency valuations. As such, assembly volumes are expected to decline in 2014, down 100k from 2013 to reach 4.3m units this year. Brazil Sales and Assembly Through the first three months of 2013, the various markets in South America have shown that the only constant trend within the region is uncertainty. Political, social, and economic unrest have continued coursing throughout Argentina and Venezuela, while Brazil is left teetering on the hopes that these markets – and the exports within the region – will recover in the near term. Brazil started the year with impressive year-over- year sales growth in January, but February and March slowed down again, resulting in a YTD decrease. This pace suggests that the sluggish Key Statistics (YTD through March) % Change (YoY) Australia light vehicle sales -2.4% Japan light vehicle sales +9.0% South Korea light vehicle sales (through Feb) +10.7% Developed Asia-Pacific Australia, Japan and South Korea Australia Sales With new car sales of over 1m units in 2013, Australia continues to be a significant market in the developed Asia-Pacific region, though YTD sales have declined in Q1. Small cars and small SUVs continue to gain market share, and are expected to grow even as the market contracts. Already a key export market for many automakers, particularly from Japan and South Korea, Australia will no longer be a manufacturing base as all final assembly plants are expected to close by the end of 2017. Though local manufacturing jobs and economies will certainly be impacted, assembly was already on the decline, with just 210k units assembled in 2013 – about half of its peak of 419k units a decade prior in 2003. Japan Sales and Assembly Light vehicle sales have enjoyed a significant increase in the past six months through the first quarter of 2014 as consumers are flocking to buy before vehicle taxes are raised from 5% to 8% in April. Through March, sales have increased 9% when compared to the same period last year, but this growth is expected to slow once the tax hike takes effect. Segment wise, hybrids and mini cars remain popular within the market, with more competitive and affordable models coming to market in the near future. In the long term, Japan continues to exhibit the signs of most developed economies, where urbanization proliferates as the overall population ages and contracts in size. Light vehicle assembly is expected to follow the same course as sales, as the Japanese brands continue shifting towards localization of assembly. Though the recent sales surge has kept assembly volumes afloat to satisfy domestic demand, overall production is expected to contract over the long term, decreasing slightly in 2014 to 8.7m units, and gradually declining to 8.3m units by 2020. Key Statistics (YTD through March) % Change (YoY) Brazil light vehicle registrations -1.7% Argentina light vehicle sales -25.6% Venezuela light vehicle sales -88.7% South America
  5. 5. 5 Autofacts For information regarding our products and services please visit us at www.autofacts.com Analyst Note Plus results of 2013 may continue well into 2014. Exports have taken a particularly hard hit, down 37.4% YTD as trade pressures with Argentina mount. Recent bilateral talks between the two countries indicate that Argentina's imposed import limitations will be eased, suggesting that perhaps production will recover from the current YTD decline of -8.8%. Argentina Sales and Assembly Though Argentina enjoyed impressive growth in both sales and production in 2013, the beginning of 2014 has not been as fortuitous for both sales and assembly, with declines of -19.6% and -9.0% respectively. The economic recession, paired with the continued devaluation of the Argentinian peso, both serve as constraints on the market, all while GDP is expected to hold flat for the year at 0.2% growth – if one could call it that. These various factors all increase the likelihood of a depressed level of sales and assembly for the short term forecast. Venezuela Sales and Assembly Venezuela has seen a virtual ceasing of sales and assembly as the nation struggles with escalating economic and political tension. Several automakers, like Toyota and Iveco have announced idled facilities while others like Chrysler and Ford have significantly decreased their output, bringing total assembly down by 77.8% YoY through February. Dollars are increasingly difficult to procure, preventing the importing of parts and payment of suppliers. Sales have fared even worse as the Venezuelan bolivar fuerte sinks to new lows, making it nearly impossible to purchase vehicles. YTD sales were down 88.7% through February 2014, and it is likely that this contraction will last through 2014 and jeopardize the country's status not only within the auto industry, but in the region and global market as a whole. Currently, the downside scenario for Venezuela could be a complete decommissioning of the automotive market in the country if the currency and economic woes are not alleviated soon. Russia Sales and Assembly The political instabilities between the primary markets within the Eastern European region have undoubtedly impacted the automotive industry within these countries, with sanctions and ongoing tensions mounting and undermining consumer sentiment. With the ongoing sales slump combined with the uncertainty in regards to Ukraine and a declining Ruble, Russian sales have declined 2.3% YTD through the first quarter of 2014, and are expected to slip further with an 8% decline for the full year to reach 2.6m units. On top of this, the Crimean conflict has triggered hesitation regarding foreign direct investment within the region across industries, raising the risk that global suppliers will refrain from entering the market. Such a scenario would strain both recent and future OEM capacity investments since local supplier bases are still lacking in both volume and quality. Assembly is also expected to decrease by 3.9% to 1.9m units in 2014. As the unrest subsides, we expect assembly to stabilize in 2015 and beyond, with a resumption of investments by global OEMs looking to shift away from importing and increase domestic production. Turkey Sales and Assembly Suffering from a recent tax hike, a weakening Lira, and burdensome regulatory changes in auto finance, light vehicle sales in Turkey have dropped by 24%. New finance regulations now require a higher down payment in order to finance a vehicle, which has delayed, and in some cases prevented consumers from purchasing. With the prohibitive factors in play, sales in Turkey are forecasted to reach just 753k units this year, representing a full year loss of 12%. Light vehicle assembly has fared better with the recent increases to localised assembly, particularly from Toyota and Hyundai. Total production volume is expected to reach nearly 1.05m units in 2014 for a slight YoY growth of 0.6%. Ukraine Sales and Assembly The Ukrainian car market grew in January and February, but experienced a dramatic dip in March with sales declining by 52% compared to March 2013. As a result, YTD sales are down 18% when compared to last year. With the ongoing uncertainty related to the Crimean conflict, sales are expected to register at approximately 190k units, for a full-year decrease of 10%. Similar to Turkey, assembly output is expected to weather the downturn and is expected to reach 68k units thanks to increasing exports. Eastern Europe 2013 Key Statistics % Change (YoY) Russia light vehicle sales -2.3% Turkey light vehicle sales -24.0%
  6. 6. 6 Autofacts For more information please visit us at www.autofacts.com Analyst Note Plus April 2014 Baseline assembly forecast data - Global Growth analytics (2013-2018) Region1 2013 2014 2015 2016 2017 2018 Unit diff. % chg CAGR CTG % Rank2 1 Asia-Pacific - developing 27,514,256 30,236,552 33,479,551 36,232,336 38,894,119 40,262,050 12,747,794 46.3% 7.9% 60.0% 1 2 European Union 15,962,569 16,610,928 17,393,055 18,253,850 18,823,766 19,107,286 3,144,717 19.7% 3.7% 14.8% 2 3 North America 16,196,382 16,803,654 17,455,158 17,602,793 18,310,387 18,274,889 2,078,507 12.8% 2.4% 9.8% 3 4 Asia-Pacific - developed 13,523,671 13,241,098 13,236,785 13,152,170 12,992,775 12,960,153 -563,518 -4.2% -0.8% -2.7% 7 5 South America 4,590,359 4,611,768 5,082,212 5,517,928 5,880,201 6,111,575 1,521,216 33.1% 5.9% 7.2% 4 6 East Europe 3,513,159 3,534,227 3,952,857 4,317,994 4,566,517 4,775,252 1,262,093 35.9% 6.3% 5.9% 5 7 Middle East & Africa 1,501,820 1,746,095 2,009,992 2,127,776 2,342,912 2,550,834 1,049,014 69.8% 11.2% 4.9% 6 Global total assembly 82,802,216 86,784,322 92,609,610 97,204,847 101,810,677 104,042,039 21,239,823 25.7% 4.7% 100.0% Global total capacity 107,003,993 114,422,215 121,992,840 127,994,860 128,524,839 129,590,254 22,586,261 21.1% 3.9% Global excess capacity 24,201,777 27,637,893 29,383,230 30,790,013 26,714,162 25,548,215 1,346,438 5.6% 1.1% Global utilisation (%) 77.4% 75.8% 75.9% 75.9% 79.2% 80.3% Source: Autofacts Global Light Vehicle Assembly Outlook 2014 Q2 Data Release (Updated April 01 2014)

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