Overview Of The European Automotive Industry

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Overview Of The European Automotive Industry

  1. 1. Overview of the European Automotive Industry Hervé SALKIN – September 2005 [email_address]
  2. 2. <ul><li>1- Key features of the European market </li></ul><ul><li>2- Comparison EU vs USA vs Japan </li></ul><ul><li>3- Case study : Renault Nissan </li></ul><ul><li>4- Case study : Peugeot PSA </li></ul><ul><li>5- Case study : Valeo </li></ul>
  3. 3. <ul><li>1- Key features of the European market </li></ul>
  4. 5. Main figures <ul><li>Largest automotive production in the world (34%) </li></ul><ul><li>7.5% of the manufacturing sector </li></ul><ul><li>Employment : 2 millions (direct), 10 millions (indirect) </li></ul><ul><li>Trade 2003 : export 67 billions € / import 34 billions € </li></ul><ul><li>Global vehicle production in units of 16.9 millions in 2002 </li></ul><ul><ul><li>Volkswagen : 5 023 264 (world no. 4) </li></ul></ul><ul><ul><li>Peugeot PSA : 3 262 100 ( no. 5) </li></ul></ul><ul><ul><li>Renault : 2 343 954 ( no. 10) </li></ul></ul>
  5. 6. Restructuring of the past 35 years <ul><li>1970 1980 1990 2005 </li></ul>Abarth Alfa Romeo Alpine AMC AstonMartin BLMC BMW Chrysler Citroen Daimler Benz De Tomaso Fiat Ford Fuji GM Honda Innocenti Isuzu Lamborghini Lotus Maserati Mazda Mitsubishi Nissan Peugeot Porsche Prince Renault Rolls Royce Saab Seat Simca Suzuki Talbot Toyota Volvo VW Alfa Romeo AMC AstonMartin BLMC BMW Chrysler Daimler Benz De Tomaso Fiat Ford Fuji GM Honda Isuzu Lamborghini Lotus Mazda Mitsubishi Nissan PSA Porsche Renault Rolls Royce Saab Seat Talbot Suzuki Toyota Volvo VW BMW Chrysler Daewoo Daimler Benz Fiat Ford Fuji GM Honda Hyundai Isuzu Mitsubishi Nissan PSA Porsche Renault Rolls Royce Rover Suzuki Toyota Volvo VW BMW Daewoo Daimler Chrysler Fiat Ford GM Honda Hyundai PSA Porsche Renault / Nissan Toyota VW
  6. 7. New EU member states Renault PSA VW Hyundai Daewoo GM Fiat VW Audi Suzuki VW-Skoda PSA-Toyota Main producers 150 000 660 000 110 000 300 000 Increase 2006 vs 2001 110 000 180 000 370 000 140 000 450 000 Production in 2001 35 15 45 18 28 Labour cost vs EU – 15 (=100) 82 100 42 100 58 Productivity vs EU – 15 (=100) 7 000 7 700 18 200 13 300 78 000 100 500 36 100 24 700 87 000 57 500 Employment 2002 1996 SL SK PL HU CZ
  7. 8. <ul><li>2- Comparison EU vs USA vs Japan </li></ul>
  8. 9. Forecast production
  9. 10. Value added millions €
  10. 11. Employment
  11. 12. Labour productivity base 100 : USA
  12. 13. <ul><li>productivity is the amount of output created (in terms of goods produced or services rendered) per unit input used. For instance, labour productivity is typically measured as output per worker or output per labor-hour. </li></ul>
  13. 14. Hourly labour cost PPP $
  14. 15. <ul><li>The labour cost figures include overtime, shift premiums and other expenses associated with having a person on a payroll. This includes the costs of negotiated benefits such as health care , pensions , education and training and prepaid legal services . It also includes statutory costs , which employers are required to pay by law, such as federal contributions for Social Security and Medicare, and state payments to workers’ compensation and unemployment insurance funds. </li></ul>
  15. 16. Labour cost : French case <ul><li>SMIC = 8.03 €/hour ; 151,67 hours/month </li></ul><ul><li>Net employee salary = 80% of gross </li></ul><ul><li>Yearly working hours = 1 453 hours </li></ul><ul><li>Social benefits = + 50% </li></ul><ul><li>HR labour related costs = + 20% </li></ul><ul><li>Salary scale = up to 2*SMIC, average 1.5 SMIC </li></ul>
  16. 17. Labour cost : case study <ul><li>Calculate average labour cost & net salary in the automotive industry of the UK, Germany, Spain & Slovakia </li></ul>
  17. 18. Difference “value added” vs “labour cost” growth rates in %
  18. 19. Trade : export 2001 in billions $
  19. 20. Trade : import 2001 in billions $
  20. 21. EU trade history import – export in billions €
  21. 22. R&D expenditures 2001 vs 1995
  22. 23. <ul><li>3- Case study : Renault Nissan </li></ul>
  23. 24. Sales worldwide in units
  24. 25. Revenues & net income in millions €
  25. 27. Renault Nissan Alliance <ul><li>NRP Nissan Revival Plan : 18/10/1999 </li></ul><ul><ul><li>Purchases : - 20% </li></ul></ul><ul><ul><li>Distribution : - 10% </li></ul></ul><ul><ul><li>Personnel : - 14% </li></ul></ul><ul><ul><li>Plant capacity utilization : 53 to 82% </li></ul></ul><ul><ul><li>Number of suppliers : 8 000 to 4 000 </li></ul></ul><ul><li>Return to profit </li></ul><ul><li>50% debt reduction </li></ul><ul><li>Share in Yens : </li></ul><ul><ul><li>Alliance 400………….580 </li></ul></ul><ul><ul><li>NRP 360…………..1200 </li></ul></ul>
  26. 30. Renault Logan : the 5.000 € car ! <ul><li>Target of emerging markets </li></ul><ul><li>Dacia acquisition : target 5.000 € car vs Peugeot/Toyota 8.000 € project in Kolin </li></ul><ul><li>Sales in France with updated equipemnts (airbags, ABS, AC …) at 7.500 € </li></ul>
  27. 31. <ul><li>4- Case study : Peugeot PSA </li></ul>
  28. 32. Sales worldwide in units
  29. 33. Revenues & net income in millions €
  30. 34. PSA strategy <ul><li>Marketing : clever portfolio with Peugeot & Citroen models </li></ul><ul><li>Export priority : 28% of sales outside Europe </li></ul><ul><li>R&D : environment friendly engines </li></ul><ul><li>Threat : increase in raw materials !!! </li></ul>
  31. 35. PSA strategy <ul><li>Several alliances : </li></ul><ul><ul><li>- Toyota : Kolin facility : 300.000 cars/year </li></ul></ul><ul><ul><li>- BMW : environment friendly gas engine </li></ul></ul><ul><ul><li>- Ford : diesel engines </li></ul></ul><ul><ul><li>- Fiat : family car 807 / Ulysse </li></ul></ul><ul><ul><li>- Fiat : Turkey Tolas project </li></ul></ul><ul><ul><li>- Mitsubishi : 4wd cars </li></ul></ul>
  32. 36. PSA Slovakia project <ul><li>Trnava new plant : 300.000 cars / year as of 2006 </li></ul><ul><li>Local market = 70.000 units </li></ul><ul><li>Low car ownership : 300 vehicles / 1.000 inhabitants </li></ul><ul><li>Ideal base for export </li></ul><ul><li>SK : future world leader vehicles per capita (PSA + VW + Hyundai = 900.000 units) </li></ul>
  33. 37. <ul><li>5- Case study : Valeo </li></ul>
  34. 38. Revenues & net income in millions €
  35. 39. Revenues breakdown <ul><li>82 / 18% : parts for new / used cars </li></ul><ul><li>Growth in Asia (+ 3%) & Latin America (+ 25%) </li></ul><ul><li>Stable in Europe </li></ul><ul><li>Decline in North America (-9%) </li></ul>
  36. 40. Valeo strategy <ul><li>Production in low labour cost countries : 48% of 129 production sites </li></ul><ul><li>External growth in China & Japan </li></ul><ul><li>Strong R&D activity : LaneVueTM on new Nissan & Citroen cars, Start-Stop on Citroen car (65 R&D centers) </li></ul><ul><li>Threat : increase in raw materials !!! </li></ul>
  37. 41. <ul><li>THANK YOU FOR YOUR INTEREST !!!!! </li></ul>

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