Advanced Technologies Catalyzing
Recalibration of Growth Strategies
in a Flat-World Eco-System
Sandeep Kar
Global Manager ...
In the Developed World: Increasing Trend of De-Urbanization – Polarization of
Commercial Vehicle Classes and Rising Demand...
In the Developing World: By 2020, We Will See Emergence of About 26
Mega Cities Creating Demand for “City Trucks”
Example ...
Global Commercial Truck Production: Polarization of Truck Classes – Light and
Heavy Commercial Vehicle Segments Growing Ra...
Highest Ranking Benefits of Powertrain Technologies:
Clear and Present Demand for Hybrid Powertrain Technologies
6%
5%
5%
...
2009 2020
Fuel-
EconomyEmissions
Lifecycle
Cost
Idling
Driver
Retention
Truck Design
Issues
Class 6-8 Trucks for 2020 – Hy...
Electric Commercial Vehicle Market: Open for
Business
Without
Government
funds EV do
not have a
future, as
initial cost
is...
Voice of Your Customers: Fleet Managers Demanding
Less Data, More Information that Enables Cost Savings
41%
20%
7%
14%
9%
...
Purchase Intentions of Advanced Safety
Technologies: Not Just About Safety
Source: Frost & Sullivan
Q: How likely you'd be...
So What Will be the Next Big Factor for Product
Differentiation After ‘Soft Technologies’
OEMs generally tend to focus on ...
Frost & Sullivan Conducted a Focus Group, Findings of
Which Showed that the 3 Cornerstones – The Body, Mind
and Soul – Con...
Suppliers Technology Portfolio Analysis (NA):
Powertrain, Telematics and Safety Technologies to Experience Most Growth
Tec...
Key Trends and Performance Indicators, (2009-2020)
Trends and
Performance
Indicators
Global Harmonization of
Platforms and...
Questions?
Sandeep Kar
Global Program Manager – Commercial Vehicles Research
Direct: 416.490.7796
Fax: 416.490.1533
Email:...
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Future of the Global Truck Industry 2010-2020

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Future of the Global Truck Industry 2010-2020

  1. 1. Advanced Technologies Catalyzing Recalibration of Growth Strategies in a Flat-World Eco-System Sandeep Kar Global Manager – Commercial Vehicle Research
  2. 2. In the Developed World: Increasing Trend of De-Urbanization – Polarization of Commercial Vehicle Classes and Rising Demand for Hybrid / Electric Commercial Vehicles Most offices / retail centers move to the first belt suburbs except non cost sensitive activities: city centres becoming shopping areas (small scale deliveries) for expensive goods and living areas for “double income, no kids” households – Hybrid / electric LCVs deliver peak efficiency and cost benefits in intra-city areas Manufacturing plants, industry offices move out to the first belt area as also medium income families while manufacturing facilities and low-medium income families relocate in the second and third belt areas with logistics centers created on 2nd belt periphery ‘Green wave’ families living outside cities in outer suburban area. Hypermarkets and malls mostly created inside the third belt low cost area (large scales deliveries) – HCVs, long-haul vehicles, and inter-modal transportation centers support hub-and-spoke logistics infrastructure 1950s Urbanization 2000s Suburbanization 2015s Network City Urban sprawl, first highways and ring road Creation of the historic centre and districts Third suburban area and cities along the highways created, ring road overblown by the urban sprawl 2020s: Branded Cities Source: Frost & Sullivan Ring Road Motorway, Living Areas growing outside the ring road as seen in London
  3. 3. In the Developing World: By 2020, We Will See Emergence of About 26 Mega Cities Creating Demand for “City Trucks” Example 1: Johannesburg and Pretoria becomes one BIG Mega City called “Jo-Toria” Example 2: Town planning could evolve with offices and homes adjacent to each other or within a small compound area (e.g. Chennai, Sao Paolo) Core City Satellite Towns HomeOffice 2020 + Interconnectivity with Sub Satellite Towns
  4. 4. Global Commercial Truck Production: Polarization of Truck Classes – Light and Heavy Commercial Vehicle Segments Growing Rapidly LCVs and HCVs emerging as most prevalent vehicle classes in the global and North American markets, implying polarization of demand. MCVs losing considerable market share in EU. HCVs and LCVs experiencing demand growth in China and India. Higher GVWR ratings imply heavier mega-trucks in Western EU and NA. 2008 Heavy CV 16.9% Medium CV 7.1% Light CV 76.0% 17.89 Million CV MD+HD CV = 4. 2 Million 22% 10% 62% 7% 24% 6% 63% 7% 18% 47% 29% 6% 16% 11% 67% 6% 19% 7% 67% 7% 16% 38% 40% 7% 2008 2020 Europe North America Asia Others 2020 23.49 Million CV MD+HD CV = 4. 7 Million Heavy CV 15.4% Medium CV 4.3% Light CV 80.3% Light Commercial Vehicles Medium Commercial Vehicles Heavy Commercial Vehicles
  5. 5. Highest Ranking Benefits of Powertrain Technologies: Clear and Present Demand for Hybrid Powertrain Technologies 6% 5% 5% 17% 59% 5% 6% 6% 6% 6% 9% 20% 19% 17% 5% 8% 8% 10% 10% 22% 18% 12% 0% 20% 40% 60% 80% 100% #1 Ranking #2 Ranking #3 Ranking Access to Powertrain Support Infrastructure Highest Ranking Benefits of Powertrain Technologies (N = 109) Lower Level Emissions Lower Weight Penalty Reduce Idling Residual Value Effectiveness Under All Operating Conditions Attractive Lifecycle Costs Longer Lifecycle Reduced Maintenance Requirement Reliability Fuel Efficiency Note: Proportions less than three not shown numerically in chart. Q: When purchasing powertrain technologies, please rank the top three benefits that are most important to your fleet from the following list below? Hybrid Powertrain Technologies – offer solutions but pose challenges too!!
  6. 6. 2009 2020 Fuel- EconomyEmissions Lifecycle Cost Idling Driver Retention Truck Design Issues Class 6-8 Trucks for 2020 – Hybrids Rising in North America and Could Make up 15% of Total Sales by 2020 Hybridization of North American Commercial Trucks (Class 6-8): Production Volumes and Market Shares of Major OEMs (2008-2015), Hybrid Power Source (2009-2012) 2008 PACCAR 27% Navistar 62% Daimler 11% Hybrid Production 600 2015 PACCAR 23% Navistar 39% Daimler 16% Hybrid Production 39,400 Volvo/Mack 11% Others 11% 8% of Class 6-8 Truck Production 0 2,500 5,000 7,500 10,000 12,500 2009 2010 2011 2012 Electric Hybrid Hydraulic Hybrid 1,100 2,300 5,600 10,700 Hybrid Truck Production Conventional HD Trucks Hybrid HD Trucks
  7. 7. Electric Commercial Vehicle Market: Open for Business Without Government funds EV do not have a future, as initial cost is very high Electric Vehicle Market: Definition of Electric Commercial Vehicle Attractiveness (NA), 2009 Standard Route from a depot / warehouse / distribution center to various client locations and back to warehouse Depot Total of 18,929 units sold in 2016 from 1,982 units in 2010 at CAGR of 38% Best Fit for Electric Commercial Vehicles: Urban/semi-urban distribution (typically under 100 miles) and GVWR< 7.5 Tonnes Inter Urban distribution1118 Long distance1726 40 12 7.5 3.5 GCW / GVW 1*GCW / GVW 1* (tonne)(tonne) Long distance25 Urban distribution7.2 Urban distribution4 Urban distribution1.5 Pure ElectricPure Electric AttractivenessAttractiveness TypicalTypical ApplicationApplication Load CapacityLoad Capacity (tonne)(tonne)
  8. 8. Voice of Your Customers: Fleet Managers Demanding Less Data, More Information that Enables Cost Savings 41% 20% 7% 14% 9% 10% 7% 9% 6% 6% 11% 5% 6% 6% 9% 7% 6% 10% 9% 7% 8% 20% 16% 15% 15% 0% 20% 40% 60% 80% #1 ranking #2 ranking #3 ranking Prognostics Scheduling Security of Mobile Resources Remote Diagnostics & Prognostics Driver Retention & Insulation from Technician Shortage Back-office Automation Real-time Monitoring of Key Vehicular Systems Regulation Compliance Screen Unsafe Drivers & Reduce Unsafe Driving Practices Mobile Resource (Driver & Vehicle) Productivity Maximization Cost Savings Note: Proportions less than three not shown numerically in chart. Safety of Mobile Resources Product Demand (Application) Remote Diagnostics & Prognostics at $12/month 50% Back-office Automation at $6/month 50% Q: When purchasing telematics technologies, please rank the top three benefits that are most important to your fleet from the following list below?
  9. 9. Purchase Intentions of Advanced Safety Technologies: Not Just About Safety Source: Frost & Sullivan Q: How likely you'd be to buy any of these safety technologies… Advanced Safety TechnologyAdvanced Safety Technology (N=109)(N=109) Level of Purchase IntentionLevel of Purchase Intention Active (Are Considering) Passive (Might Consider) No Interest Tire Pressure Monitoring SystemTire Pressure Monitoring System 55% 39% 6% Disc Brakes and Larger Drum BrakesDisc Brakes and Larger Drum Brakes 51% 46% 3% Tractor-based Roll Stability ControlTractor-based Roll Stability Control 35% 57% 8% Blind-spot Detection SystemBlind-spot Detection System 31% 63% 6% Driver Drowsiness/Distraction WarningDriver Drowsiness/Distraction Warning 31% 62% 7% Electronic Stability ControlElectronic Stability Control 31% 61% 8% Lane Departure WarningLane Departure Warning 31% 60% 9% Trailer-based Stability ControlTrailer-based Stability Control 29% 57% 14% Forward Collision WarningForward Collision Warning 19% 69% 12% Adaptive Cruise ControlAdaptive Cruise Control 18% 69% 13% Automatic Collision Mitigation SystemAutomatic Collision Mitigation System 18% 69% 13% Night VisionNight Vision 17% 67% 16%
  10. 10. So What Will be the Next Big Factor for Product Differentiation After ‘Soft Technologies’ OEMs generally tend to focus on one of the 7 key factors (as shown on the right) for positioning of their vehicle brands For each factor OEMs evaluate whether they want to be ‘best-in-class (BIC)’, ‘amongst the leader’ or ‘a follower’ Those factors which strengthen their brand values are normally bracketed in the ‘BIC’ box (e.g. Volvo for safety, Navistar for telematics, Kenworth for aerodynamics) This new factor will evolve from the current focus on environment. We already see huge evidence of this factor in modern society “Health, Wellness and Well-Being” is Expected to be the Next Key Product Differentiation Factor for OEMs Factors which currently form basis of differentiation among OEMs Telematics Driving Experience Comfort and Convenience Lifecycle Cost Safety Vocation Applicability Fuel-efficiency Source: Frost & Sullivan
  11. 11. Frost & Sullivan Conducted a Focus Group, Findings of Which Showed that the 3 Cornerstones – The Body, Mind and Soul – Contribute to Driver’s Definition of HWW The Truck Cabin is a WORKPLACE, Regulations Expected to Enter The Cabin Mood Sense of connectivity Stress levels Mental health Sense of optimism Attitude Security Safety Personal values Personal fulfilment Self image / self actualisation Sight / vision Touch & feel Smell / breathing Noise Temperature Wellness MindBody Soul
  12. 12. Suppliers Technology Portfolio Analysis (NA): Powertrain, Telematics and Safety Technologies to Experience Most Growth TechnologyTechnology Installation%Installation% 20052005 Installation %Installation % 20152015 RevenuesRevenues 2005 (Million $)2005 (Million $) RevenuesRevenues 2015 (Million $)2015 (Million $) Selective Catalytic Reduction (SCR) (Class 6-8) 0.0 76.0 0.0 2,657.4 Automatic Transmission (Class 6-8) 17.8 21.2 566.5 932.4 Exhaust Gas Recirculation (EGR) (Class 6-8) 0.0 24.0 0.0 479.5 Diesel Particulate Filter (Class 6-8) 0.0 100.0 0.0 412.5 Hybrid Electric Powertrain (Class 6-8) 0.0 5.7 0.0 332.7 Diesel Oxidation Catalyst (Class 6-8) 27.1 100.0 165.0 247.5 Hybrid Hydraulic Powertrain (Class 6-8) 0.0 2.3 0.0 74.1 Electronic Stability Control (Class 6-8) 2.0 45.7 6.3 77.2 Tire Pressure Monitoring System (Class 6-8) 0.0 47.6 0.0 64.1 Integrated Collision Mitigation System (Class 6-8) 0.0 12.1 0.0 63.0 Lane Departure Warning (Class 6-8) 0.9 6.6 3.1 13.2 Blind Spot Detection (Class 6-8) 0.9 17.1 1.7 12.2 Forward Collision Warning (Class 6-8) 0.8 3.6 4.2 11.8 Telematics – Penetration of CV Population 3.8 28.2 957.7 6,500.3 Telematics – Penetration of School Bus Population 2.7 37.4 4.5 82.3 LeadingNorthAmerican Heavy-truckTechnologies Fuel Economy, Mobile Resource Productivity, Safety, Regulation Compliance Cost Reduction
  13. 13. Key Trends and Performance Indicators, (2009-2020) Trends and Performance Indicators Global Harmonization of Platforms and Technologies Cap and Trade Operating Environment Alternative Powertrain Technologies Rising Distributed Electronics- MRM, Prognostics Less Data More Information Expansion in Soft Technology Revenues Diminishing Engine Footprint Legislative Move Towards Higher GVWR Trend Towards Vertical Integration Steady Reduction in Truck and System Form-Factor BRIC Strategy, NA and EU Strategy LCVs and Mega-trucks (3.5T to <60T) Baseline Globally Harmonized Emission and Safety Technologies Greater Reliance on Advanced Turbochargers, Advanced Propulsion Technologies Mega Trucks, More Axles per Truck, Revenue Expansion for Chassis Systems, Inter-modal Exposure Active Role in Policy Formulation to Benefit From Regulations Virtual Integration, Consolidation, Global Diversification, Adjacent Market Opportunities Concerted Strategies Towards Weight Reduction, 3,000 LBs Reduction= 500 Gallons of Fuel, 5 MT of CO2 reduction Coexistence of Hybrid, CNG, LPG, Biodiesel , Electric, Fuel-cell Multiplexed Architecture, Electronic Interfaces, Vehicle Networking Technologies, Time and Mission Critical Information Delivery 15-20% of Revenues of Truck and System Sales Through Soft Technologies
  14. 14. Questions? Sandeep Kar Global Program Manager – Commercial Vehicles Research Direct: 416.490.7796 Fax: 416.490.1533 Email: skar@frost.com

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