H. What do you believe are the greatest challenges facing the sector or industry you

would like to specialize in at IE? What role do you hope to be able to play in this sector or

industry in the medium term?

Sebastiano Peroni

The global automotive industry

Overall, the global automotive industry is more profitable than it was five years ago.

By 2020, global profits for automotive OEMs are expected to rise by almost 50 %. This growth will be mainly driven by the emerging markets, such as China; a stagnant growth of profits is forecast for U.S, Europe, Japan and South Korea.

How are evolving the market and the industry? By 2020, global profits could increase by another EUR 25 billion, to EUR 79 billion.

The benefits will be not equally distributed among all geographic areas or types of cars; indeed, some regions will do much better than others.

The Europe decline

• The BRICs (Brazil, Russia, India, China) and RoW (rest of the world) increased by 60 percent their profits.

• While China made profits for EUR 18 billions, sales dropped significantly in Europe, North America, Japan and South Korea.

European industry decreased: from the recorded profits of EUR 15 billions in 2007 to a loss of EUR 1 billion in 2012.

In the recent past the source of profits shifted

2007 2008 2009 2010 2011 2012

BRIC and ROW 12 10 5 18 26 31

North America 9 -11 6 16 16 23

Europe 15 6 0 3 7 -1

Japan and South Korea 5 -3 -6 -4 -6 1

-20 -10

0 10 20 30 40 50 60

EUR

bill

ion

s

Profit development by geography

Which reasons for this decline in Europe?

• fewer people bought cars (four million units less), principally due to the European Government austerity measures after the economic crisis;

• the decline in sales increased the cost pressure on producers, as capacity utilization dropped in many plants;

• the fierce competition, which kept down prices; this factor was an advantage for emerging markets.

What future for European automotive sector?

While premium manufacturers did not decrease in sales thanks to their global position, high volume producers have been dramatically hit by the drop in demand.

What decision must be taken by European producers?

•To increase competitiveness, automakers must take measures to reduce rising costs (in the long term);

•To plan and organize flexible production systems;

•To transfer some plants to other location to improve the cost position in the long term;

•To use the consolidation model of US to address overcapacity.

100 94

55

105

0

50

100

150

2000 2005 2009 2013

Consolidation in North America

Rate of utilization

70

80

90

100

110

2000 2005 2009 2013

Growing overcapacities in Europe

Emission regulations New regulations are encouraging

OEMs to invest in e-mobility

They trigger higher costs; in Europe the 2020 target should be reached with advanced conventional technologies.

Electric vehicles may be the answer for the future; European producers should focus on them.

What is needed in the European automotive sector?

European vision

Combined with an International overview; emerging markets are

increasing their importance.

I always search for the most demanding challenges.

This program will allow me to gain the skills that are necessary to bring new ideas in this sector in order to increase profits and support a sustainable development.

My role in the medium term

IE would give me the opportunity to analyze and understanding the global markets and practice to be a decision maker; to be a manager means handle perfectly different factors. An international network like IE is the proper University to prepare a well-trained international manager.

European automotive industry should be open towards the global market. This is the greatest challenge for the future of European automotive industry.