automotive foresight reigns• closures • fenders • front shock towers • roof • a &...

© 2016 IHS Markit© 2016 IHS Markit. All Rights Reserved.

Foresight ReignsAdvantages of Being a Proactive Supplier

AUTOMOTIVE

27 October 2016 | Shanghai, China

Paul Haelterman, Vice President & Managing Director | Automotive Advisory Services

+1 248 465 2836, [email protected]

© 2016 IHS Markit

Structural/industry issues

Table of Contents

Solutions• Body-in-white material forecasts• VPAC bench & scenarios• Supplier strategic planning & opportunity targeting• Competitor analysis

• Regulatory impacts : US/NA and China forecasts • Industry issues

© 2016 IHS Markit

Global CO2 targets are aggressive and converging

© 2016 IHS MarkitNotes: Reduced CO2 emission equates to improved fuel efficiency. Global convergence toward 2025.Source: International Council on Clean Transportation

Regulations strengthen : Compliance gaps emerge

Automotive Conference – Shanghai| 27 October 2016

© 2016 IHS Markit

US midterm evaluation scenario

• By 2021, IHS and EPA/NHTSA largely agree; the gap to compliance is relatively small.

> However, the years after that will be increasingly difficult for OEMs to comply.

> This will require much more technology than currently assumed by EPA/NHTSA.

0

10

20

30

40

50

60

Fuel

eco

nom

y

US passenger cars

0

5

10

15

20

25

30

35

40

45

Fuel

eco

nom

y

US light trucks

CAFE target

Automotive Conference – Shanghai | 27 October 2016

© 2016 IHS Markit

Electrification is required

• Larger D- and E-segment offerings require several solutions

• Fewer options into the next decade

• 48V is an enabler, although a learning/cost curve ensues

• Low-oil-price environment complicates

• CARB electrification mandate complicates0%

10%20%30%40%50%60%70%80%90%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023BEV Full Hybrid Mild Hybrid Start/Stop ICE Only

Electrification =Stop/start, MHEV, FHEV & BEV

Electrification takes holdShift from start/stop to mild/full hybrids starts next decade


Propulsion systems – North America

© 2016 IHS Markit

© 2016 IHS Markit

Growth plateaus: Mix becomes critical

1.8

2.0

2.2

2.4

2.6

Q1 14 Q1 15 Q1 16 Q1 17 Q1 18

NA o

utpu

t (m

illio

n)

Detroit 3 & Asian 4 Quarterly Volume

Six-month rolling average0.50.70.91.11.31.51.71.9

Q1 14 Q1 15 Q1 16 Q1 17 Q1 18

NA o

utpu

t (m

illio

n)

Six-month rolling average

0.30.40.50.60.70.80.91.0

Q1 14 Q1 15 Q1 16 Q1 17 Q1 18N

A o

utpu

t (m

illio

n)

Six-month rolling average

Pickup

SUV

• Asian 4 volume eclipses Detroit 3 in 2017

• Sedan decline at Detroit 3 not compensated by SUV/CUV and pickups

• Industry needs to react to the new marketplace


Detroit 3 & Asian 4 quarterly volume Industry - Pickup, sedan, and SUV/CUV quarterly volume

Detroit 3 - Pickup, sedan, and SUV/CUV quarterly volume

Asian 4: Honda, Hyundai, Nissan, Toyota

© 2016 IHS Markit

-24% -5% 0% -2% -7% -2%8%

3%

20%26%

20% 22%28%

70%

5.96.2 7.0

6.7 6.77.0

7.3 7.3 7.8 7.5 7.8 7.88.4 8.4

4.55.9

6.6 6.26.8

7.9 7.59.3 9.5 9.4 9.5

10.8

14.4

-40%

-20%

0%

20%

40%

60%

80%

4

6

8

10

12

14

16

A B B MPV B SUV C C MPV C SUV D D MPV D SUV E E MPV E SUV F

2016 Gap 2016Target 2016 Base

2016 China fuel-efficiency forecast

*The baseline fuel consumption forecast is simulated by VPaC

-0.29 -0.02 -0.12 -0.49 -0.15 0.61 0.25 1.53 1.96 1.58 1.73 2.37 5.91

L/100km

Average gap ~20% or 1.5L/100km

-1.42

Problems for big vehicles after 2016


© 2016 IHS Markit

-24%

-5% 0% -2%-7%

-2%

8%3%

20%26%

20% 22%28%

70%

-1%

13%20% 18%

8%

20%

29%

22%

34% 35%

43%

32%

46%

71%

2%11% 9% 10%

13%8%

11% 12%

22% 24%

11%

22% 16%

31%

-40%

-20%

0%

20%

40%

60%

80%

4

6

8

10

12

14

16

A B B MPV B SUV C C MPV C SUV D D MPV D SUV E E MPV E SUV F

2016 Gap 2020 Gap FE Growth2016 Market Share 2020 Market Share 2020 Target2020 Base 2016 Target 2016 Base

2016 China fuel-efficiency forecast

*The baseline fuel consumption forecast is simulated by VPaC

CAFC forecast 2016 vs. 2020

0.63 1.08 0.90 0.43 1.06 1.58 1.06 1.92 1.97 2.54 1.90 2.92 4.53

Unit：L/100km


© 2016 IHS Markit

Electrification is the major trend of Chinese PV market

0%10%20%30%40%50%60%70%80%90%

100%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025ICE: Stop/Start Mild-Hybrid PHEV ICE Electric HEV

Propulsion Systems – North AmericaTotal PV market development by propulsion—ChinaElectrification is

required• Pure ICE engine still

took 80% of total PV market in 2015

• Stop/start will be massively equipped in the next five years and then replaced by hybrid-mild beyond 2022

• Low-oil-price environment complicates

• Electrification mandate complicates


© 2016 IHS Markit

Three disruptive realitiesHow do industry participants adapt …

Electrif-ication

•Start/stop >> plug-in mild hybrid >> full hybrid >> BEV•Enablers – Legislation, 48V, mass reduction•Implementation depends on segment, geography, scale, infrastructure, and customer purchase capability•How does the ICE and accessories adapt through this process? What about transmissions and driveline?

Automated driving

•Speed of implementation depends more on legislation versus technical capability•Several disruptors enter with little patience for automotive timelines, processes, and structure•Will the lack of driver intervention alter content and structure of the powertrain?•Areas of the vehicle materially altered by automated driving: interior, powertrain, electrical, and chassis

Shared mobility & connected

car

•New generations live in a more global, urban, and environmentally friendly world•Ride sharing and reduced/limited driver input changes ownership, maintenance, and use structures•Impact on municipalities, health care, dealer/service infrastructure, need for a license•How does shared mobility alter the vehicle cycle, supply base, insurance, aftermarket, standardization, and safety?

2015-2020•PHEVs•Level 2 >> 3 driving•Uber/Lyft

2020-2025•Increased electrification•Level 3 >> 4•Expanding mobility solutions

2025+•BEVs & infrastructure•Level 3 & 4 >>> 5•Vehicle parc reflects shifts


© 2016 IHS Markit

~20

20

Mass reduction shifts beyond the “edge segments”

Mild hybrid rise starts in larger segments, 48V

L3 autonomy, more ADAS content, warranty visibility

Toda

y

BIW & chassis system lightweighting begins

Down displacement, multi-speed trans & S/S

ADAS & connectivity content rises, warranty costs

A looming cost cliff alters the marketOEMs, suppliers, regulators, and customers are all impacted.

103

~20

25

Integration of ‘Non-Standard Materials’ & joining methods

Full hybrid, BEV, and alternative drive formats rise

L3/4 autonomy, global influences, system profit pools shiftSuccess in a rising cost environment

• Understand your costs, markets, and risk profile

• Diversify customers, segments, and cadence

• Hedge technologies• Smart vertical integration

• Proactive engagement• Today’s differentiators are not tomorrow’s


© 2016 IHS Markit

Supplier business planning needs to change

• Increased competition• Faster cycles• Global interconnections

> More than 70% of platforms are built in more than two regions.

• Value chain and profit pools shift> Suppliers hold a higher value of vehicles value: ~65% and growing

> Increased “buy” focused on electronics and powertrain vs. traditional systems

• Innovation origination> Suppliers drive more of the innovation and capital risk

• Product and process complexity> Despite platform count reductions, homologation, legislation, reduced cadence, and trim

level expansion drives increased complexity


© 2016 IHS Markit

Foresight reigns: Suppliers need to be more proactive

• Anticipate market and technology trends

• Understand their organization’s priorities

• Do they have the right customer mix?

• Is there a globalization strategy?

• Are the right human resources and physical footprint in place?

• Should they entertain joint venture or affiliations to reach new markets?

Suppliers need to expand their business planning past traditional vehicle and

powertrain forecasts in an increasingly complex marketplace.


© 2016 IHS Markit

Solutions

• Body-in-white (BIW) material forecasts• VPAC bench & scenarios• Supplier strategic planning & opportunity targeting• Competitor analysis

© 2016 IHS Markit

The IHS BIW material forecast processEstablish BIW share by system, usage, and material

Cur

rent

veh

icle

str

uctu

re • IHS light vehicle production forecast

• Third-party research• Industry contacts/

interviews• Primary and

secondary research• Multi-material

exposure Fore

cast

str

uctu

res • IHS light vehicle

production forecast• IHS sales-based

powertrain gap analysis

• Capital, supplier affiliations, competition, capability, and cost

Inte

gral

bus

ines

s pl

anni

ng • Output in Excel and PowerPoint

• Ability to drive material, process, and location trends

• Linked to the IHS production forecast

• Unique approach suited to suppliers of all tiers


© 2016 IHS Markit

Material change priority by system/location in BIW• Dependent upon OEM, segment,

cost/availability, and compliance gap

• Material shift order of operations assumptions (by segment)

• Hood

• Decklid

• Closures

• Fenders

• Front shock towers

• Roof

• A & B-Post

• Rest of BIW bodies

BIW Structure (Above)IHS BIW analysis also includes hood, fenders, closures, roof, and decklids


© 2016 IHS Markit

Material forecast analysisTotal North American light vehicle industry by pounds

7.05.0

5.1

2.6

2.6

2.6

0.7

1.1

1.0

1.4

0.5

2.1

0.41.50.4

860

910

960

1010

0

2

4

6

8

10

12

14

16

18

20

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Ave

rag

e B

IW m

ass

(lin

e)

Bill

ion

s of

pou

nd

s (N

etU

sag

e)

Mild Steel High Strength Steel Advanced High Strength SteelUltra High Strength Steel GigaPascal Steel Aluminum - SheetAluminum - Cast/Ext CFRP/SMC/Plastic Other

Total BIW declines despite growth in CUVs and rising NA output

Source: April 2016 Material Forecast


© 2016 IHS Markit

Solutions

• Body-in-white material forecasts• VPAC bench & scenarios• Supplier strategic planning & opportunity targeting• Competitor analysis

© 2016 IHS Markit

IHS VPaC planning process

• IHS will set up a workshop to understand your goals:

• Europe dropping diesels from A and B segment vehicles?

• Global 2-3 cylinder dominance?

• Cost/benefit for compliance, EV or PHEV?

Workshop•Define Needs•Capabilities•Potential solutions

Quote•Based on workshop specifications

Kickoff meeting•In-person or via web conference

VPaC custom development•Incorporation of sales-based powertrain

Presentation of findings

• Outputs will leverage VPaC data to answer critical questions about the market or opportunity.

> Delivered in PowerPoint with a robust discussion of findings between IHS and you


© 2016 IHS Markit

Example: US powertrain technology trend

Out of the base forecast, IHS predicts;

• Which technologies will gain, remain, shrink

• When you will see robust growth

• Electrification trend

• Trends not only engine/transmission but other related components

• Fuel efficiency for each vehicle and power unit level


© 2016 IHS Markit

Example: US midterm evaluation scenario

• There are significant gaps in technology assumptions between IHS and EPA/NHTSA

> GDI

> Stop/start

> Full HEVs

> Plug-ins

• However, EPA and NHTSA indicate that this is enough technology for OEMs to comply with 2021 FE and GHG targets.

0

10

20

30

40

50

60

70

80

90

Turbocharging Gasoline Direct Injection non-Hybrid Stop-Start

Prod

uctio

n Sh

are

[%]

EPA Phase 2

NHTSA Phase 2

EPA TAR

NHTSA TAR

IHS Markit

MY 2021 Passenger Car

0

2

4

6

8

10

12

14

16

Mild SI-E Hybrid Full SI-E Hybrid Plug-in Hybrid Electric

Prod

uctio

n Sh

are

[%]

EPA Phase 2

NHTSA Phase 2

EPA TAR

NHTSA TAR

IHS Markit

MY 2021 Passenger Car


© 2016 IHS Markit

Example: US midterm evaluation scenario

• What would happen if we added additional technology to the fleet in order for the vehicles to comply in the 2022–25 range?

• IHS works together with our partners to set up scenarios/views of a possible future:

> Highest level of technology

> Specific technology path

> Lowest cost for compliance0

10

20

30

40

50

60

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Fuel

eco

nom

y (m

pg) CAFE target

US passenger cars

© 2016 IHS Markit


© 2016 IHS Markit

Supplier business planning is continuous

Organizational priorities

Goals & priorities

Targets & goals

Opportunity analysis

Capability/ resource planning

Plan communication &

execution

IHS Automotive• Competitor & market assessment• Legislative/regulatory impact• Vehicle/powertrain & component forecasts• Opportunity analysis

Supplier business planning involves all facets of the suppliers organization:

Finance, sales, marketing, design, engineering, supply chain, manufacturing, logistics, Suppliers,

customers, and stakeholders

Organizational priorities Targets & goals Gap analysis Opportunity

analysisCapability/

resource planningPlan

communication & execution


© 2016 IHS Markit

Engine opportunity targeting

Supplier-specific opportunity targeting analysis given unique

criteria:

• Sourcing window• Sourcing structure• Volume, technology,

region, and incumbent criteria


© 2016 IHS Markit

Top-10 opportunities: 24 monthsE: Platform E: Program E: Model

VP: ProductionNameplate VP: Platform VP: Program 0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 100K 110K 120K 130K 140K 150K 160K 170K

Average Volume

2019 2020 2021 2022 2023 2024Engine Start of Production

S2G (HR) HR16DE (XH16) 1.6L 16V DOHC L4 Sentra CMF-C/D L21B

DURATEC35 D33 TI-VCT 3.3L 24V DOHC V6 Explorer CD6 U625

New ZR 2.0ZR 2.0L 16V DOHC L4 Corolla GA-C 150B


CSS-NGE/NDE (L3T) G45T-3 1.35L 12V DOHC L3 Trax VSS-F B/C 9BUC

DRAGON DRAGON 1.5 1.5L 12V DOHC L3 Escape C2 CX482

CUMMINS ISB ETJ 6.7L 24V OHV L6 2500/3500 DS/DJ DK

GEN II/III/IV/V L83 - GEN V - 5.3L AFM 5.3L 16V OHV V8 Silverado VSS-T T1XC

PENTASTAR 3.6L UPGRADE 3.6L 24V DOHC V6 Grand Cherokee WK/WK(2) WL

VQ VQ35VD 3.5L 24V DOHC V6 Pathfinder D P42R

166.9K

117.2K

148.9K

141.9K

89.7K

86.6K

115.2K

82.4K

95.9K

82.9K

E: Platform E: Program E: ModelVP: ProductionNameplate VP: Platform VP: Program 0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 100K 110K 120K 130K 140K 150K 160K 170K

Average Volume

2019 2020 2021 2022 2023 2024Engine Start of Production

S2G (HR) HR16DE (XH16) 1.6L 16V DOHC L4 Sentra CMF-C/D L21B

DURATEC35 D33 TI-VCT 3.3L 24V DOHC V6 Explorer CD6 U625



CSS-NGE/NDE (L3T) G45T-3 1.35L 12V DOHC L3 Trax VSS-F B/C 9BUC

DRAGON DRAGON 1.5 1.5L 12V DOHC L3 Escape C2 CX482

CUMMINS ISB ETJ 6.7L 24V OHV L6 2500/3500 DS/DJ DK

GEN II/III/IV/V L83 - GEN V - 5.3L AFM 5.3L 16V OHV V8 Silverado VSS-T T1XC

PENTASTAR 3.6L UPGRADE 3.6L 24V DOHC V6 Grand Cherokee WK/WK(2) WL

VQ VQ35VD 3.5L 24V DOHC V6 Pathfinder D P42R

166.9K

117.2K

148.9K

141.9K

89.7K

86.6K

115.2K

82.4K

95.9K

82.9K


© 2016 IHS Markit


VP: ProductionNameplate VP: Platform VP: Program 0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 100K 110K 120K

Average Volume

2020 2021 2022 2023 2024Engine Start of Production

G4-NU NU-2.0L 2.0L 16V DOHC L4 Sonata N LF(2)

GR 7GR 3.5L 24V DOHC V6 Sienna GA-K 580L(2)

WORLD ENGINE L4 ED6 - TIGER SHARKM-AIR 2.4L 16V SOHC L4 Cherokee C-EVO/CUSW KL(2)

ELECTRIC Electric 0L 0V None None Model 3 CUV GEN III Model E

GR 7GR 3.5L 24V DOHC V6 Highlander GA-K 440A(2)

FB FB20_DI 2.0L 16V DOHC H4 Outback SGP BF4(2)

DURATEC35 D35 GTDI TI-VCT 3.5L 24V DOHC V6 F-150 SuperCrew T3 P702

DRAGON DRAGON 1.5 1.5L 12V DOHC L3 C-CUV C2 CX430

G4-NU NU-2.0L 2.0L 16V DOHC L4 Optima N JF(2)

New-L (AP2) L15B MFI(AP2) 1.5L 16V DOHC L4 Fit GSP(2) 2WF(2)

117.3K

81.3K

92.6K

75.9K

87.5K

97.4K

61.5K

53.3K

61.4K

47.8K

E: Platform E: Program E: ModelVP: ProductionNameplate VP: Platform VP: Program 0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 100K 110K 120K

Average Volume

2020 2021 2022 2023 2024Engine Start of Production

G4-NU NU-2.0L 2.0L 16V DOHC L4 Sonata N LF(2)

GR 7GR 3.5L 24V DOHC V6 Sienna GA-K 580L(2)

WORLD ENGINE L4 ED6 - TIGER SHARKM-AIR 2.4L 16V SOHC L4 Cherokee C-EVO/CUSW KL(2)

ELECTRIC Electric 0L 0V None None Model 3 CUV GEN III Model E

GR 7GR 3.5L 24V DOHC V6 Highlander GA-K 440A(2)

FB FB20_DI 2.0L 16V DOHC H4 Outback SGP BF4(2)

DURATEC35 D35 GTDI TI-VCT 3.5L 24V DOHC V6 F-150 SuperCrew T3 P702

DRAGON DRAGON 1.5 1.5L 12V DOHC L3 C-CUV C2 CX430


New-L (AP2) L15B MFI(AP2) 1.5L 16V DOHC L4 Fit GSP(2) 2WF(2)

117.3K

81.3K

92.6K

75.9K

87.5K

97.4K

61.5K

53.3K

61.4K

47.8K


© 2016 IHS Markit


VP: ProductionNameplate VP: Platform VP: Program 0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 100K

Average Volume

2021 2022 2023 2024Engine Start of Production

New-L (AP2) L15B GDI(AP2) 1.5L 16V DOHC L4 Civic CCA 2SV(2)

J New-J30 turbo (AP5) 3.0L 24V DOHC V6 Pilot 2SL/2SF 2SF(2)

G4-NU NU-1.8L 1.8L 16V DOHC L4 Elantra KP3 AD(2)

AR 8AR-FTS 2.0L 16V DOHC L4 RX GA-K 760A(2)

New-K (AP4) New-K20 GDI 2.0L 16V DOHC L4 Civic CCA 2SV(2)



New ZR 2.0ZR-HEV 2.0L 16V DOHC L4 Prius GA-C 690X

SGE LFV 1.5L 16V DOHC L4 Malibu VSS-F D/E 9DSC

G4-NU NU-1.8L 1.8L 16V DOHC L4 Sorento N UM(2)

91.6K

58.3K

65.6K

68.4K

64.8K

61.1K

61.4K

60.4K

99.2K

45.2K

E: Platform E: Program E: ModelVP: ProductionNameplate VP: Platform VP: Program 0K 10K 20K 30K 40K 50K 60K 70K 80K 90K 100K

Average Volume

2021 2022 2023 2024Engine Start of Production

New-L (AP2) L15B GDI(AP2) 1.5L 16V DOHC L4 Civic CCA 2SV(2)

J New-J30 turbo (AP5) 3.0L 24V DOHC V6 Pilot 2SL/2SF 2SF(2)

G4-NU NU-1.8L 1.8L 16V DOHC L4 Elantra KP3 AD(2)

AR 8AR-FTS 2.0L 16V DOHC L4 RX GA-K 760A(2)




New ZR 2.0ZR-HEV 2.0L 16V DOHC L4 Prius GA-C 690X

SGE LFV 1.5L 16V DOHC L4 Malibu VSS-F D/E 9DSC

G4-NU NU-1.8L 1.8L 16V DOHC L4 Sorento N UM(2)

91.6K

58.3K

65.6K

68.4K

64.8K

61.1K

61.4K

60.4K

99.2K

45.2K


© 2016 IHS Markit

Competitor/technology assessment

Critically important to understand:

Competitors’ profile: finance, footprint, etc.

Their product offerings and tech roadmap

Differentiation strategy Local procurement and

logistics M&A, investment Market share and

Customer share

In which area will change occur? What’s your plan?


© 2016 IHS Markit

Summary• Lack of volume growth in key markets shifts the focus to optimizing mix and

focusing on high-margin opportunities

• Unprecedented number of challenges facing the industry:

• Global regulatory initiatives

• Shifting of resources and energy toward nontraditional systems

• Supplier consolidation and investment expectations of multiregional strategies

• Three disruptors: Electrification, autonomous vehicles, and shared mobility

• Strategies to navigate the impending “cost cliff”

• Actionable innovation, vertical integration, and risk mitigation


IHS MarkitTM COPYRIGHT NOTICE AND DISCLAIMER © 2016 IHS Markit.

No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent of IHS Markit. Content reproduced or redistributed with IHS Markit permission must display IHS Markit legal notices and attributions of authorship. The information contained herein is from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions and analyses that are based upon it, and to the extent permitted by law, IHS Markit shall not be liable for any errors or omissions or any loss, damage, or expense incurred by reliance on information or any statement contained herein. In particular, please note that no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, forecasts, estimates, or assumptions, and, due to various risks and uncertainties, actual events and results may differ materially from forecasts and statements of belief noted herein. This presentation is not to be construed as legal or financial advice, and use of or reliance on any information in this publication is entirely at your own risk. IHS Markit and the IHS Markit logo are trademarks of IHS Markit.

IHS Markit Customer Care:[email protected]: +1 800 IHS CARE (+1 800 447 2273)Europe, Middle East, and Africa: +44 (0) 1344 328 300Asia and the Pacific Rim: +604 291 3600

124

Thank you!

automotive foresight reigns• closures • fenders • front shock towers • roof • a &...

Documents