Your SlideShare is downloading. ×
0
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Us automotive survey webinar 05222012 posted to website
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Us automotive survey webinar 05222012 posted to website

349

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
349
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
7
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  1. Booz & Company Detroit, Michigan May 20122012 U.S.AutomotiveSurveyAdvancedLook
  2. Our team today  Brian is a Chicago-based partner in the firm’s global automotive team  He specializes in working with automotive Tier One suppliers on business unit strategy and transformation, with extensive experience in cost Brian Collie transformation, accelerating the growth agenda, portfolio management, and manufacturing strategy Chicago  Recent Tier One Supplier engagements include: NA manufacturing network restructuring, global turnaround strategy, sourcing transformation, and inorganic growth assessment  Scott is a New York-based partner in the firm’s global automotive team  Over the past twenty years, Scott has worked extensively with automotive companies to successfully develop and implement strategy based transformations – gaining deep expertise across many areas of the Scott Corwin automotive value chain New York  Client engagements have involved: corporate strategy, operational restructuring, portfolio strategy, product development, advanced R&D and innovation, supply chain management, manufacturing optimization, sales marketing and distribution, information technology, and new business modelsBooz & Company29 May 2012 1
  3. Introduction Booz & Company recently conducted its U.S. Automotive Industry Survey and Confidence Index – an annual study examining current state of the U.S. automotive industry, key challenges facing it, attitudes of its executives, and what companies are doing in response Over 200 automotive executives from more than 75 automotive vehicle manufacturers and suppliers participated in an online survey conducted during February and March During today’s webinar we would like to: – Share what industry executives had to say on the future of the automotive industry – Discuss key implications for OEMs and suppliers, and – Answer any questions you may have about the resultsBooz & Company29 May 2012 2
  4. Relative to last year, industry executives are significantly morebullish on the current state of the automotive industry Perceived State of the Industry Compared to One Year Ago 66% 63% In 2011, 53% of OEMs and 37% of Suppliers described the current state of the industry has “About the Same” or “Somewhat Worse” relative to same time prior year 31% OEM 26% Supplier 7% 6% 0% 0% 0% 1% Much Worse Somewhat Worse About the Same Somewhat Better Much BetterBooz & Company29 May 2012 3
  5. The improvement in the industry’s performance was driven inlarge part by the industry restructuring and pent-up demand Key Drivers of Strong 2011 Industry Performance Percentage of respondents that ranked a driver in their top 3 72% 68% OEMs 62% Suppliers 58% 58% 48% 46% 34% 34% 30% 30% 22% 22% 16% Availability Pricing Better Improved Production Pent-Up Industry Pricing Availability Production Better Improved Pent-Up Industry of Credit Discipline Product Customer Discipline/ Demand Restructuring Discipline of Credit Discipline / Product Customer Demand Restructuring Confidence Tight Tight Confidence Inventory InventoryBooz & Company29 May 2012 4
  6. OEMs credit their current product portfolio and pipeline as thereason for their positive outlook in 2012 Important Internal Factors Contributing to Positive 2012 Outlook – OEMs Percentage of respondents that ranked a factor in their top 3 69% 60% “Other” includes internal process execution, leadership, and strategic vision 29% 25% 25% 18% 18% 20% 16% 10% 10% Engineering/ Other Sales Ability to Customer Financial Cost Position Marketing Retail Product Current R&D Innovate Experience/ Position Network/ Pipeline Product Relationship Footprint PortfolioBooz & Company29 May 2012 5
  7. For Suppliers, though product is important, customer mix, and to alesser extent cost position, play a key role in shaping outlook Important Internal Factors Contributing to Positive 2012 Outlook – Suppliers Percentage of suppliers that ranked a factor in their top 3 58% 55% 43% “Other” includes internal 38% process execution, leadership, and strategic vision 27% 28% 19% 20% 7% 5% Other Marketing Sales Financial Engineering/ Ability to Cost Position Product Current Product Customer Position R&D Innovate Pipeline Portfolio Base and RelationshipsBooz & Company29 May 2012 6
  8. Respondents forecast U.S. sales in 2012 to approach 14M, withgrowth then settling to levels more consistent with GDP Average U.S. Light Vehicle Sales Forecasts Five Year Outlook for the US. Auto Industry 2012–2016Units (Millions) 86% 86% 16.0 OEM 15.5 15.4 Supplier 15.0 14.6 14.5 14.0 13.7 13.5 13.0 12.8 12.5 10% 12.0 6% 8% 4% 11.6 0.0 2010 2011 2012 2013 2014 2015 2016 Little to no growth Steady growth Strong growth consistent and prosperity with GDPBooz & Company29 May 2012 7
  9. Over the next five years, executives believe Hyundai/Kia andVolkswagen/Audi are the OEMs most likely to gain market share Expected U.S. Market Share Changes in Next 5 Years 2% 100% 10% 4% 10% 10% 27% 26% 31% 34% 32% 24% 40% 52% 59% 46% 40% 53% 46% 88% 66% 47% 72% 38% 28% 28% 31% 16% 20% 13% 7% Mercedes Nissan/Infiniti Honda/ GM Chrysler/ Toyota/ BMW/Mini Ford VW/Audi Hyundai/Kia Acura Dodge/Fiat Lexus Lose Share Maintain Share Gain ShareBooz & Company29 May 2012 8
  10. Executives see a bright future for Chinese OEMs -- forecasting arate of U.S. market penetration more rapid than historical precedent Chinese OEMs with Greatest Potential to Forecasted Chinese OEM U.S. Share in 2020 Capture U.S. Share through 2020 50% Geely 24% 47% U.S. Market Share 45% of Korean OEMs SAIC 22% was 5% as recently 40% Chery 19% as 2008 35% 32% BYD 11% 30% FAW 9% 25% Dongfeng 6% 20% Greatwall 4% 15% 11% JAC 3% 10% 10% ChangAn 2% 5% GAC 1% 0% 0%-4% 4-8% 8%-12% 12%+Booz & Company29 May 2012 9
  11. Alternative powertrains will gain share -- however, adoption ratesare seen as being extremely sensitive to government support Expected U.S. Market Share of Alternative Powertrains by 2020 Continued Government Support No Government Support% of Responses % of Responses 29% 50% 30% 50% 45% 25% 40% 35% 20% 18% 30% 15% 13% 14% 14% 25% 20% 20% 10% 7% 15% 13% 12% 5% 10% 5% 5% 4% 1% 0% 0%% 0%% 10%-15% 15%-20% 20%-25% 25%-30% 10%-15% 15%-20% 20%-25% 25%-30% 5%-10% 5%-10% 0%-5% 0%-5% 30% + 30% +Booz & Company29 May 2012 10
  12. Of the various powertrain choices, respondents are most confident about the long-term prospects of full hybrid & mild hybrid Current Confidence in Long-Term Expected Leading Alterative Powertrain in 2020 Prospects of Alternative Powertrains vs. 2011 42% 39% 40% Full Hybrid 30% 70% OEM Supplier Mild Hybrid 35% 65% 25% Plug-In Hybrid 55% 45% 14% 12% 12% Battery Electric 71% 29% 10% 4% 2%Fuel Cell Electric 75% 25% Less Confident More Confident Fuel Cell Battery Plug-In Mild Full Hybrid Electric Electric Hybrid Hybrid Booz & Company 29 May 2012 11
  13. Specific to their own companies, both OEMs and suppliers alikeare forecasting strong revenue growth for 2012, however, capacitymay be an issue Planned Growth in 2012 U.S. Revenue Current Capacity Situation 40% OEM 55% Supplier 51% 29% 27% 24% 36% 23% 34% 21% 18% 14% 15% 9% 2% 2% 0% 0% Negative No 1%-5% 6%-10% 11%- Greater Still have more Comfortable with Capacity Growth Growth 15% than capacity than current capacity constrained 15% market demandsBooz & Company29 May 2012 12
  14. In light of more advantageous supply-demand dynamics, OEMs &Suppliers describe themselves as being disciplined about pricing Current Pricing Approach – OEMs Current Pricing Approach – Suppliers 53% 58% Will OEMs maintain this discipline if market dynamics and 39% supply greatly These results suggest exceeds demand? a dramatic departure from recent behavior 24% where filling the factory was the norm 19% for many suppliers 4% 3% Significantly Holding Opportunistically Significantly Aggressively Opportunistically Maintaining reducing use the line on increasing increasing use using price to using pricing as strong pricing of incentives incentives incentives of incentives win business a lever to win discipline programBooz & Company29 May 2012 13
  15. Compared to competitors, OEMs view cost position, customerexperience, and financial position as their most significant areas ofweakness Perceived Performance Relative to Key Competitors – OEMs 4% 2% 2% 2% 2% 2% 2% 100% 9% 9% 9% 9% 9% 17% 15% 24% 30% 29% 31% 28% 26% 30% 21% 43% 37% 41% 32% 29% 52% 44% 48% 50% 50% 39% 42% 23% 24% 31% 11% 17% 15% 11% 17% 9% 9% 8% 6% Cost Customer Financial Retail Ability to Current Product Sales Marketing Engineering/ Position Experience/ Position Network/ Innovate Product Pipeline R&D Relationship Footprint Portfolio Very Poor Performance Performance Matches Competitors Strong Performance Poor Performance Good PerformanceBooz & Company29 May 2012 14
  16. Suppliers meanwhile cite their sales / marketing capabilities andcost position as their most significant areas of weakness Perceived Performance Relative to Key Competitors – Suppliers 2% 2% 2% 100% 5% 10% 6% 6% 12% 10% 10% 13% 21% 26% 31% 33% 30% 28% 30% 41% 48% 44% 54% 33% 35% 47% 49% 55% 38% 27% 35% 23% 27% 11% 14% 6% 11% 11% 8% 4% 2% Marketing Cost Position Sales Ability to Financial Product Engineering/ Current Customer Innovate Position Pipeline R&D Product Base and Portfolio Relationship Very Poor Performance Performance Matches Competitors Strong Performance Weak Performance Good PerformanceBooz & Company29 May 2012 15
  17. Respondents cite In-Vehicle Connectivity & Entertainment as thetechnology most likely to see widespread adoption over the nextfive years Technologies Most Likely to See Widespread Adoption in the Next Five Years Percentage of respondents that ranked a technology in their top 3 85% 52% 52% 48% 42% 20% 1% Other "Green" Active Safety Composite/Light LED Lighting Passive Safety In-Vehicle Material Usage Systems (er)-weight Systems Connectivity and materials EntertainmentBooz & Company29 May 2012 16
  18. 38% of OEM respondents say they intend to create theirown platform for integrating digitization and connectivity Plans for Integrating Consumer Digitization / Connectivity 38% This may be a potentially risky strategy, given that personal technology devices have far shorter product cycles than automobiles -- witness the ubiquity of GPS systems on mobile phones -- and that a 24% single family may have multiple drivers who share multiple cars 17% 14% 7% Outsure to consumer Establish a Allow consumers/ Allow suppliers to Create own platform electronics players flexible platform external system develop platform in a consortium to plug into carBooz & Company29 May 2012 17
  19. 2011 will sadly be remembered for the devastating earthquake &tsunami in Japan, an event which impacted ~55% of OEMs Production Impact of the Japanese Earthquake and Tsunami OEM Supplier 35% “Other” includes higher 34% margins as a result of shortages and needing to retrofit vehicles after sale 26% 26% 21% 21% 13% 8% 7% 4% 2% 3% No impact- supply No impact- had No Impact- avoided Some impact Significant Impact Other chain not affected safety stock interruptions through redundanciesBooz & Company29 May 2012 18
  20. Contingency planning is viewed as the most important action forpreparing for such “Black Swan” events, but to date, action haslagged Important Preparatory Steps for “Black Swan” Events and Steps Actually Taken by Respondents 68% In Top 3 Important Measures 59% Action Taken 52% 51% 45% 42% 32% 31% 29% 26% 19% 19% 15% 12% 3% 4% Other No action Created new Built Moved to Moved to Identified risks Worked with taken org. structure redundancy increase the localize and developed suppliers on for risk into sourcing use of dual supply base contingency contingency management sourcing plants planningBooz & Company29 May 2012 19
  21. In summary, these results suggest a few forces coming together tohelp shape the industry in the coming years …  The US auto recovery demonstrates that with stronger balance sheets, legacy liabilities shed, debt reduction, product/capital investment, this industry can return to consistent levels of profitability at lower annual sales volumes  The industry clearly has expressed a very sober, collective understanding that it needs Re-Emergence to grow smartly -- namely not let capacity grow faster than natural market demandof Fundamentals  This has been a product led renaissance and there is strong confidence in the portfolio  Similarly suppliers are unwilling to cede leverage in their relationship with OEMs and are working to stretch existing production capacity further, postponing new capacity  A new normal is emerging with an emphasis on building brand equity with consumers, improving the experience, continuing to improve the cost position, and competing globally  US remains the most profitable automotive market in the world, but growth is occurring more rapidly in emerging markets  Requires automakers to preserve their competitive position in developed markets while Shifting Demand also funding the investments necessary for longer term growth Centers  Increases the importance of gaining a much greater understanding of the unique requirements, dynamics, and needs of emerging markets and positioning your company to be able to compete with fundamentally different economics and possibly against different competitorsBooz & Company29 May 2012 20
  22. … forces continued  There is also a strong view that improvements in internal combustion engines are still possible and can generate meaningful increases in fuel efficiency  The adoption rate of alternative powertrains is highly dependent upon government Powertrain and support, fuel prices and availability, and OEM/supplier willingness to make investments Technology – Led by full and mild hybrids Uncertainty – Still skeptical about the potential of full electric and fuel cell vehicles  The industry is on the cusp of very significant technological changes, especially in vehicle connectivity that could result in creating real innovation in personal mobility  These will require significant incremental investments and making “bets”  The unfortunate events of the Japanese tsunami and floods in Thailand brought home the limitations of a lean global supply chain to Black Swan events  Actions taken in response seem highly appropriate given what happened – assess the Inter-Connected damage, weigh future events and probabilities, work with suppliers to be better Supply Chain prepared, build new organizational capabilities, etc.  We wonder though if the industry is really prepared for the next Black Swan event or were these actions “once and done” and will this be less prominent of an issue as time goes by?Booz & Company29 May 2012 21
  23. Q&ABooz & Company29 May 2012 22
  24. SCOTT L. CORWIN Booz & Company (N.A.) Inc. BRIAN E. COLLIE Booz & Company (N.A.) Inc. Vice President 101 Park Avenue Vice President 225 West Wacker Drive New York, NY 10178 Suite 2270 Tel +1 212 551 6578 Chicago, IL 60606-1228 Fax +1 212 551 6732 Tel +1 312 578 4637 Mobile +1 917 853 3735 Fax +1 312 578 4668 scott.corwin@booz.com Mobile +1 312 498 2704 www.booz.com brian.collie@booz.com www.booz.comBooz & Company29 May 2012 23

×