8447779800, Low rate Call girls in Kotla Mubarakpur Delhi NCR
03 sean mc alinden - auto ind recovery in 2025
1. U.S. Auto Industry in Recovery and in
2025
Sean P. McAlinden, Ph.D.
Executive Vice President of Research, Chief Economist
Center for Automotive Research
Ann Arbor, MI
smcalinden@cargroup.org
May 18, 2011
Great Designs in Steel Seminar
Steel Market Development Institute
Livonia, Michigan
www.autosteel.org
3. Motor Vehicle Sales
By Countries:
Japan S. Korea Germany Canada China U.S.
20
18
16
14
12
Millions
10
8
6
4
2
0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
www.autosteel.org
4. Top 15 Global LV Markets 2020
Millions 40
China
Top 15 = 97M (82%)
35
30
25
USA
20
15
Japan
India
10
Germany
Brazil
Russia
Indonesia
France
Canada
Spain
Korea
Italy
5
UK
Iran
Source: J.D. Power Automotive Forecasting
www.autosteel.org
Source: J.D. Power Automotive Forecasting
5. U.S. Sales and Production
(Will Vehicles Get Smaller?)
www.autosteel.org
6. U.S. Auto Sales & Production Will Steadily
Improve with Economy
•GDP Growth is Moderate (Slow)
•Used Vehicle prices and age of fleet are high
•Credit is more available/stock market recovering
•Dollar is low against Yen and OK against Euro
•Bin Laden is gone Bye Bye
But . . .
•Unemployment rate and length is terrible
•House prices are still falling and will fall more . . .
•States/Cities cutting spending and employment
•Consumer confidence was improving, now falling . . .
•Gas prices spiking with food prices
•Higher commodity prices = higher auto prices
•Japan crisis might halt automaker production as parts run short
www.autosteel.org
7. U.S. Light Vehicle Sales Percent Change
YTD Through April: 2011 vs. 2010
19.6
Total
Light Trucks 21.9
Passenger
17.6
Cars
0 5 10 15 20 25
Percentage Change
Source: Automotive News
www.autosteel.org
8. Steady But Slow Improvement
U.S. Light Vehicle Sales Monthly SAAR:
April 2010 Through April 2011
14,000
13,450
13,500 13,170
13,000 13,099
Unit Sales in Thousands
12,687 12,640 13,120
12,500
12,217 12,250
12,000
11,823
11,500 11,489 11,553
11,000 11,067
10,820
10,500
10,000
9,500
9,000
Source: Automotive News Data Center
www.autosteel.org
9. Only 1.8% Growth in 1st Quarter
Need 3% GDP Growth To Have a Positive Sales Growth
GDP Growth Rate and Sales Growth Rate, 1950-2010
50
40
30
Sales Growth, %
2010
20
10
0
-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10
-10
-20
-30
GDP Growth, %
www.autosteel.org
10. Back to 9%
Need Unemployment Rate Below 6%
to Have Growth?
Light Vehicle Sales and Unemployment Rate, 1978-2010
18
17
Light Vehicle Sales, Millions
16
15
14
2010
13
12
11
10
9
8
3 4 5 6 7 8 9 10 11 12
Unemployment Rate, %
www.autosteel.org
11. U.S. Light Vehicle Age and
Scrappage Rate
Average Age Scrappage Rate (%)
10.0 10.2
9.7 9.8
9.4 9.5
8.9 8.9 9.0 9.1
8.6 8.8 8.8
6.8 6.7
6.4 6.2
5.9 6.1
5.8 5.7
5.5
5.0 5.2
4.8
4.3
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: R.L. Polk
www.autosteel.org
16. Segment Breakdown - U.S. LV Sales Percent Change
April 2011 vs. April 2010
Total 17.7
Pickup 6.5
Van 3.5
SUV 16.7
CUV 20.7
Luxury Car 17.3
Large Car -22.3
Middle Car 18.6
Small Car 34.9
-30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0
Percentage Change
Source: Ward’s Automotive Reports
www.autosteel.org
17. April U.S. Light Vehicle Sales:
Market Share by Segment
Pickup 11.8
Van 5.8
SUV 6.3
CUV 24.2
Luxury Car 7.2
Large Car 2.4
Middle Car 21.7
Small Car 20.6
0.0 5.0 10.0 15.0 20.0 25.0 30.0
Market Share Current Month
Source: Ward’s Automotive Reports
www.autosteel.org
18. Average Real Gasoline Price* and Detroit 3 U.S. Market Share
1970-2010
$4.00
90
$3.50
Percentage Market Share
$3.00
80
Gas Price per Gallon
$2.50
70
$2.00
$1.50 60
$1.00
50
$0.50
Average Yearly Price per Gallon of Gas
Detroit 3 Yearly Market Share
$0.00 40
Months
*Gas prices expressed in 2011 USD
www.autosteel.org
19. Real Gasoline Price and D3 Market Share
• For every 10 cent
Dependent Variable: D3MKT
Method: Least Squares
Sample (adjusted): 1986 2009
increase in real
Included observations: 24 after adjustments
gasoline price, Detroit
Coefficient Std. Error t-Statistic Prob.
3 market share drops
C
GAS
96.46619
-17.58972
3.272152
1.843779
29.48096
-9.540034
0.0000
0.0000
by 1.7 percentage
R-squared 0.805331 Mean dependent var 66.29250
point.
Adjusted R-squared 0.796482 S.D. dependent var 9.107380
S.E. of regression 4.108607 Akaike info criterion 5.743700
Sum squared resid 371.3743 Schwarz criterion 5.841872
Log likelihood -66.92441 Hannan-Quinn criter. 5.769745
F-statistic 91.01225 Durbin-Watson stat 1.140955
Prob(F-statistic) 0.000000
www.autosteel.org
21. Small Cars Market Share
Results
Dependent Variable: MKT
Method: Least Squares Results:
Sample (adjusted): 1980 2009
Included observations: 30 after adjustments
Convergence achieved after 15 iterations
One dollar increase in gasoline
MA Backcast: 1978 1979
price per gallon will increase small
Coefficient Std. Error t-Statistic Prob.
car market share by 2.8%.
However, a one thousand dollars
increase in per capita personal
C 34.44039 4.007248 8.594524 0.0000
INCOME -0.000768 0.000142 -5.422039 0.0000
GAS 2.800797 0.804730 3.480420 0.0019
GDPR -0.242260 0.101095 -2.396354 0.0247 disposable income will offset the
MA(1) 1.226285 0.029495 41.57645 0.0000
MA(2) 0.918106 0.023180 39.60775 0.0000 small cars market share by 0.77%.
R-squared 0.945034 Mean dependent var 18.93667
Therefore, if gasoline price
Adjusted R-squared
S.E. of regression
0.933583
1.135833
S.D. dependent var
Akaike info criterion
4.407320
3.269466
increases by one dollar, it takes
Sum squared resid
Log likelihood
30.96280
-43.04199
Schwarz criterion
Hannan-Quinn criter.
3.549706
3.359117 $3,646 increase on per capita
F-statistic
Prob(F-statistic)
82.52692
0.000000
Durbin-Watson stat 1.329571
personal disposable income to
cancel out the effect on small cars
Inverted MA Roots -.61+.74i -.61-.74i
market share.
www.autosteel.org
23. Material Trends
1. The current trend substituting for mild steel still has a way to go
(e.g., aluminum doors and magnesium/ titanium/ composite
components).
2. There is a threshold at which you can no longer continue to
substitute lighter-mass materials due to structural performance
(e.g., stiffness). (Other concerns arise with manufacturability,
safety, repairability, recyclability and supply chain.)
3. Aggressive mass reduction will eventually require a significant
architectural redesign to accommodate, for example:
– Aluminum (e.g., space frame structure)
– Magnesium & composites (major molded unibody
components)
www.autosteel.org
24. Average Material Consumption for a Domestic Light Vehicle
The average light vehicle in 2008 contained more than 2,000 pounds of steel, most of it
conventional steel. High and medium strength steel, however, made up more than 10% of the
vehicle. The use of aluminum grew from 1995 to 2008, while the use of iron castings declined.
60.0%
50.0%
40.0%
Regular steel
Mass (% of Total)
High and medium strength steel
30.0% Stainless steel
Iron castings
Aluminum
20.0%
Magnesium castings
Plastics and plastic composites
10.0%
0.0%
1975 1980 1985 1990 1995 2000 2005 2010
Year
Ward’s Communications, Ward’s Motor Vehicle Facts and Figures, 2009, (and updates, 2010), Detroit, MI, 2009, p. 63
www.autosteel.org
25. Today’s Example of State-of-the-Art
Honda Civic
05M Civic
Grade Grade
590 590
440 440
340 340
270 270
11%
19%
50%
38% 590 MPa
68%
steel use
2%
9%
tripled
3%
HSS Usage Rate: 32% HSS Usage Rate: 50%
50% of body now high strength steel
CONFIDENTIAL - DRAFT
www.autosteel.org
26. Mass Reduction, in General, is not Free
More expensive materials, slower fabrication, joining/interface complexity
10% reduction in mass 6% - 7% reduction in fuel consumption
“Re-optimize” vehicle: 30% additional benefit in secondary mass reductions
$2,000
$1,800
$1,600 $1,500
$1,400
$1,200
$1,000 NAS Estimate
$800 TAR Estimate
$600
$400
$200 Mass reduction
$- (pounds)
36 180 360 720
www.autosteel.org
27. John German, ICCT, EIA Energy Conference, April 26, 2011
www.autosteel.org
28. John German, ICCT, EIA Energy Conference, April 26, 2011
www.autosteel.org
29. Primary Magnesium Production
A 40% reduction in 2008 mass of 4,070 lbs. (net of
900 powertrain)
using 16% magnesium would require 2.2 million
800 tons for U.S. production of 10 million vehicles. But
world production only 800 thousand tons in 2007.
700
600
Thousand Tons
500 U.S./Canada
400 China
Global
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: International Magnesium Association
www.autosteel.org
30. Material and Vehicle Price Indexes
(Producer Price Index, 1998 = 100)
Iron and steel mills
200
Aluminum sheet, plate and foil
manufacturing
Magnesium Ingot
150 Motor Vehicles
100
50
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Bureau of Labor Statistics, U.S. Geological Survey
www.autosteel.org
31. Technology Pathways
(Intermediate, Mid-size Vehicle)
2008 Total Annual %
Reduction in 2025 Total
Source of Estimated Cost
Pathway Technology Description Consumption Incremental RPE
Estimate Incremental Reduction
Improvement (5 year)
RPE (5 yr)
DCT, GDI, Turbo &
1) Spark Ignited NAS
Downsize, 5% mass
29.0% $2,159 0.5% $2,105
(Above plus:) 15%
2) SI Extended Mass NAS/CAR mass (10% addn. 37.5% $3,089 0.5% $3,012
mass)
3) SI Extended Stop/Start NAS/CAR (Above plus:) stop/start 40.0% $3,974 0.6% $3,855
4) Compression Ignited NAS CI, DCT, 5% mass 37.5% $5,905 0.5% $5,757
(Above with 15% mass
5) CI Extended Mass NAS/CAR
(10% addn. mass)
46.0% $6,835 0.5% $6,664
6) Full Hybrid NAS Power Split, 5% Mass 43.9% $6,027 2.2% $5,364
(Above with 15% mass
7) Full Hybrid - Extended NAS/CAR
(10% addn. mass)
52.4% $6,957 1.9% $6,296
Series PHEV 40, 15%
8) Hybrid - Strong NAS/CAR
mass (2009)
2.5 (250%) $14,156 2.1% $12,670
BEV 75, 10% mass,
CAR/EPA/
9) Electric Vehicle
NAS
27kwh ($300/kwh in 6 (600%) $10,584
2025)
www.autosteel.org
32. FE Technology Segmentation
Two important assumptions:
• Unknown impact from A/C credits (to lower CAFE requirements)
• BEV forecast by J.D. Power is 0.9% of market for 2020
www.autosteel.org
33. Average Fuel Expenditures at Increasing MPG Levels:
Holding Annual Average VMT= 13,000
$9,000.00 $3.50/gal. $6.00/gal.
$8,000.00 $7,800
$7,000.00
Annual Fuel Cost
$6,000.00
$5,000.00
$4,550
$4,000.00 $3,900
$3,000.00 $2,600
$2,275 $1,950
$2,000.00
$1,560
$1,517
$1,300
$1,138
$910 $1,114
$1,000.00 $758
$650
$0.00
10 20 30 40 50 60 70
Source: CAR Research
Miles Per Gallon
www.autosteel.org
34. Present Value of Fuel Savings from MPG Increases (Netted for
Electricity Cost) & Estimated Average Retail Price Increase to
Improve MPG
$7,000
Savings Pgas=$3.50
$6,000 $5,851 Savings Pgas=$6.00
Estimated Retail Price Increase
$5,000
$3,744
$4,000
$3,385
$3,077
$3,000
Scenario I Scenario II Scenario III Scenario IV
$2,000
$1,526 $1,443
$1,000
$551 $571
$241 $230
$0
22.0-37.6 MPG 37.6 - 40.8 MPG 40.8 - 44.8 MPG 44.8 - 49.6 MPG
-$591 -$233
-$1,000
r=10% (discount rate);
Increases in MPG
Rebound rate=10%;
Fuel Savings valued over 5 years
VMT average years 1-5: Scenario (S) I=13,737; SII=13,923; SIII=14,157miles; SIV= 14,436 Source: CAR Research, DOT NHTS 2009
www.autosteel.org
37. Conclusions
• Sales/Production/Employment will increase as
economy slowly improve
• Vehicles fleet at record age – replacement
sales must happen
• Long run threat from extreme fuel economy mandates
• May shrink industry sale, production, and employment
www.autosteel.org