state of the industry - cfa institute presentations/011717_presentation.pdf3.1b gallons of fuel...

© 2017 IHS Markit. All Rights Reserved.© 2017 IHS Markit. All Rights Reserved.

State of the IndustryAnd Key Introductions at 2017 NAIAS

Stephanie Brinley, Senior AnalystDetroit Athletic Center Detroit, MI

January 17th, 2017

© 2017 IHS Markit. All Rights Reserved.

Contents

• Automotive Sales Environment for Near Term

• Autonomy and Mobility: Implications

• NAIAS 2017


US: Light Vehicle Sales Forecast

4

6

8

10

12

14

16

18

20

Mill

ions

Sales Vol Car Light Truck Linear (Sales Vol)

Sales peak here; return to previous long-term trend level possible

Market peaks in mid-2017 – weaker buying conditions, slower job creation, rising oil prices start next cycle. Some return to ‘cars’ likely next decade.

Source: IHS Markit Automotive, current light vehicles sales forecast

201717.5m

Car – sales flatten - rises with as affordability declines

LT – peaks in 2018, weaker housing, higher fuel & regulations force decline

Pre-Crash40 year trend:

+140k annually


Utility Vehicles Continue to Gain—But Cars Remain Significant

• Share of Utility Vehicles continues to increase

• Share of Pickup Trucks is steady and stable

• Utility Vehicle and Cars make up more than 75% of the market

• Pickups, Sports Cars, MPVs and Vans make up remaining 25%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

CUV Car Pickup

2016 2020

Share of Sales, 2016 vs 2022

Source: IHS © 2017 IHS


Premium, Luxury Segments Continue to Gain

• Sales of premium and exotic price and brand vehicles continue to gain share

• Gain is supported by increased number of offerings, particularly utility vehicles

• Mainstream brands see pricing increase on higher technology, safety features

0.3% 11.5%

88.2%

1.3%13.2%

85.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Exotic Premium Standard

2016 2020Source: IHS © 2017 IHS

© 2017 IHS Markit. All Rights Reserved. 7

Top 12 Automakers

Market Share, Top 12 Automakers, 2016-2020CY 2016 CY 2017 CY 2018 CY 2019 CY 2020

General Motors 16.8% 16.7% 16.4% 16.2% 15.8%

Ford 15.0% 14.7% 14.4% 14.2% 14.4%

Toyota 13.9% 14.1% 13.9% 13.5% 13.6%

FCA 13.2% 12.3% 11.9% 12.1% 12.0%

Honda 9.4% 9.6% 9.6% 9.5% 9.3%

Nissan 8.9% 8.5% 8.5% 8.7% 8.5%

Hyundai 8.1% 8.3% 8.7% 8.7% 8.8%

Volkswagen 3.3% 3.9% 4.2% 4.3% 4.4%

Subaru 3.4% 3.4% 3.5% 3.6% 3.5%

Daimler 2.2% 2.3% 2.3% 2.2% 2.3%

BMW 2.1% 2.2% 2.2% 2.3% 2.4%

Mazda 1.8% 2.0% 1.9% 1.9% 2.0%Source: IHS Markit © 2017 IHS


Automaker Share, Car, UV and Truck

49% 49%

21%25%

13% 10%0%

10%

20%

30%

40%

50%

60%

% of CY 2016 % of CY 2020

CUV Pickup Car

Fiat Chrysler Automobiles


37%31%

25%

40%

31%

21%

0%

10%

20%

30%

40%

50%

CUV Pickup Car

% of CY 2016 % of CY 2020

General Motors


45%

35%

13%

44%38%

11%

0%

10%

20%

30%

40%

50%

Car CUV Pickup

% of CY 2016 % of CY 2020

Toyota Motor Sales


33% 31%

22%

34% 33%

21%

0%5%

10%15%20%25%30%35%40%

CUV Pickup Car

% of CY 2016 % of CY 2020

Ford Motor Company


46%41%

1%

46%42%

3%

0%

10%

20%

30%

40%

50%

Car CUV Pickup

% of CY 2016 % of CY 2020

American Honda


50%

39%

7%

47%42%

7%0%

10%

20%

30%

40%

50%

60%

Car CUV Pickup

% of CY 2016 % of CY 2020

Nissan North America



Automaker Share, Car, UV and Truck

48% 43%39%41%

0%

10%

20%

30%

40%

50%

60%

% of CY 2016 % of CY 2020

Car CUV

BMW


60%

49%

31%39%

0%

10%

20%

30%

40%

50%

60%

70%

% of CY 2016 % of CY 2020

Car CUV

Volkswagen AG


42% 43%42% 39%

0%

10%

20%

30%

40%

50%

% of CY 2016 % of CY 2020

CUV Car

Daimler AG


65%58%

30% 33%

0%

10%

20%

30%

40%

50%

60%

70%

% of CY 2016 % of CY 2020

Car CUV

Hyundai/Kia


25% 25%

74% 75%

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

% of CY 2016 % of CY 2020

Car CUV

Subaru


48% 50%49%44%

0%

10%

20%

30%

40%

50%

60%

% of CY 2016 % of CY 2020

Car CUV

Mazda North America



Contents



• NAIAS 2017


Autonomy and Mobility: Implications

• Why autonomy? What do the levels of autonomy mean?

• When will autonomous vehicles really arrive?

• What does mobility have to do with it?


Why autonomous? There’s not a single reason

Safety

35,092 killed in 6.3Mcrashes in the US in

2015,94% driver fault

1.24M road deaths worldwide

in 2010, half are vulnerable road users

Source: NHTSA, WHO

Societal Cost

$277B in economic costs

1.9% of GDP

$871B in quality-of-life costs

5.8% of GDP

Source: IRTAD, various

estimates, 2010

Efficiency

$160B in US congestion costs

3.1B gallons of fuel burned in US due to

congestion

6.9B hours wasted sitting in traffic

Source: Texas A&M

Transportation Institute & INRIX, 2014

Consumer

Connectivity

Convenience

Sustainability

Mobility

Choice

Lower Cost


Language defined – SAE Levels as industry standardAutonomous = Level 4 and Level 5

Based on Society of Automotive Engineers levels of automation (SAE J3016)

Note: IHS Markit Autonomous Vehicle forecasts use different structure but similar nomenclature. SOURCE: IHS Automotive Autonomous Driving Service

Incr

easi

ng

Au

tom

atio

n

No Automation

Driver Assistance

Partial Automation

Conditional Automation

High AutomationIHS Self-driving car

Full AutomationIHS Driverless car

Steering or Braking

Steering and Braking

L0

L1

L4

L2

L3

L5


Language defined – Real-world examples of SAE LevelsAutonomous = Level 4 and Level 5

Based on Society of Automotive Engineers levels of automation (SAE J3016)Note: IHS Markit Autonomous Vehicle forecasts use different structure than SAE despite similar nomenclature.

No Automation

Driver Assistance

Partial Automation

Conditional Automation

High AutomationFull autonomy | Self-driving car

Full AutomationFull autonomy | Driverless car

L0

L1

L4

L2

L3

L5

Collision warningLane departure warningBlind spot information

Adaptive cruise controlLane keep assistAutonomous parking

AutopilotTraffic jam assist

Advanced autopilotsDrivers intermittently re-engage

Fully autonomous autopilotsDrivers disengage in more situations

Fully autonomous driverless fleetsMobility service business model

2010 2015 2020 2025 2030

SOURCE: IHS Automotive Autonomous Driving Service


Autonomy and Mobility: Implications

• Why Autonomy? What do the Levels of Autonomy Mean?


• What does mobility have to do with it?


Current state of the art & announced plans

L2

L3

L4

Wide variety of systems bordering L2 Many incremental and evolutionary steps within Level 2

L5

IHS Level 4: Fully autonomous with driver controlsIHS Level 5: Fully autonomous without driver controls

LEVEL OF AUTOMATION

2014 2015 2016 2017 2018 2019 20202021

Limited drive via remote driver control

“Autonomous by 2020”announcements

Details or timeline unclear


New capabilities are needed to enable autonomyAutomakers & suppliers gaining expertise via acquisition, partnership, internal development

Sensing

Computing

User Experience

Driver Software

Cloud Connectivity

Maps Artificial Intelligence

Auto Expertise Tech Expertise

Service Business Model


Technological Progress: Auto Companies vs Tech Companies

• How quickly will Auto Technology and Manufacturing converge?

> Tech companies have software and tech expertise, massive resources, agility and no fear of failure

> Auto companies understand complex auto industry requirements, product lifecycles and support, vehicle dynamics, and control traditional sales channels and incumbent markets

> Which companies in which sector will expand and perfect their skillsets faster?

> What becomes the biggest asset? Is it still manufacturing and footprint, or is it technology and innovation?

+ Auto companies develop/acquire new talent at a Tech sector pace

+Auto maintains leverage while partnering with Tech to make and manufacture new vehicles

+Tech companies find willing Auto manufacturing partners who may not have own Tech skills

+ Tech leverages new automated manufacturing to produce cars


Expected Deployment Scenario L4-52020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

North America

W. Europe

Japan / Korea

China

2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040North America

W. Europe

Japan / Korea

China

1 – 10% > 10%0 – 1%0% > 50%(Sales rate relative to base sales forecast)

+ Favorable regulations enabling innovation

+ Consumer interest & acceptance

- Over-regulation and stubborn views stifle innovation

- Distrust, unwillingness to buy


Self-driving sounds good, but there are challengesTechnology

•Easiest challenge to ‘solve’ but still takes time•Artificial intelligence, computing, sensors get better and cheaper

Regulation•Developing regulatory framework in the US•Adapting Vienna Convention in Europe and abroad

Insurance•New paradigm of product liability, not personal liability•Adapting the insurance model to dynamic usage, multiple users

Public Acceptance•Value proposition brings mobility to more people at lower cost•Trust in autopilot today a likely sign of wider acceptance over time

Bad Press•Early crashes and fatalities could delay acceptance•Will consumers accept fatalities attributed to a robot?


Mobility and Autonomy

• Why Autonomy? What do the Levels of Autonomy Mean?


• What does Mobility have to do with it?


Mobility branding

• Automaker sub-brands become the home for new technologies

> BMW i

> Mercedes-Benz EQ

> VW Moia & ID Concept Vehicle

• ACES is a popular combination

> Autonomous

> Connected

> Electric

> Shared

• Investments galore in car-sharing, ride-hailing and ride-sharing

> The obvious: Uber, Lyft, Didi, Ola, Grab

> GM Maven

> Daimler car2go

> BMW ReachNow

> VW Moia, Gett, PayByPhone

> Geely / Volvo Lynk & Co.

• BMW and Daimler reportedly merge car-sharing

> Even if untrue, there is interest in unification in order to survive hyper-competitive mobility alternatives


Autonomous capability will blur the lines between today’s mobility business models and use cases

Taxi

Owner/ Driver

Taxi

Owner/ Driver

Ride-hailing

Car sharing

Autonomous on-demand

mobility service

Owner/ Driver

Past Present Future

For-Hire

RentalRental

For-Hire


US ride-hailing economics favor urban markets

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Indicative cost comparison: Personal Vehicle Ownership vs Ride-Hailing

Source: IHS Markit © 2016 IHS Markit

Cos

t per

Yea

r

miles per year

US City Avg

US Avg

Private Car

Ride Pool

Ride-Hail

Autonomous Ride Pool


Contents



• NAIAS 2017


NAIAS 2017

• Key Launches

• Key Concepts

• Other Notables


Key Launches

Chevrolet Traverse• Migrating to CHI platform alongside Acadia, Enclave, XT5, and XT6, and future Blazer

• Vehicle Production: Lansing Delta Twp., Michigan (105k UPA)• 2” longer wheelbase, 3rd row seating, 362lbs lighter• 2.0L turbo I-4 (255hp), 3.6L V-6 (305hp), w/ 9-Speed auto • Carplay/Android Auto, 4G LTE Wi-Fi, MyLink

GMC Terrain• Vehicle Production: SLP, Mexico (110k UPA)• 400 lbs lighter than first gen Terrain• Shift-by-Wire introduced, creating more console space• Optional 1.6L turbodiesel (236-lb-ft) with 6-speed automatic• Std:1.5L turbo (170 hp), Opt. 2.0L turbo (252) 9-speed auto• Std: Carplay/Android Auto, 4GLTE Wi-Fi, and myGMC app


Key Launches

Toyota Camry• Vehicle Production: Georgetown, Kentucky • Emphasis on Hybrid model differentiation, interior and exterior design improvements

• Improved driving dynamics, suspension, visibility• Lower ride height – increase interior room• I-4 and 3.5L V-6 powertrains

Honda Odyssey• Platform: 2SL/2SF (475k UPA), utilizes HSS, aluminum, magnesium to reduce Odyssey weight by 100lbs

• Vehicle production: Lincoln, Alabama• Active grille shutter, improved aerodynamics• Segment-leading seating flexibility• Technology focused on family interaction• New 10 speed Honda auto


Key Launches

Kia Stinger GT• Vehicle Production: Sohari, South Korea• Major styling shift to create room vs. Hyundai• Extensive use of Aluminum and high-strength steel• Powertrain: Longitudinally mounted 2.0L turbo (252 hp), and twin turbo 3.3L V-6 (365 hp), 8-Speed Automatic

• Fastback bodystyle a departure

Volkswagen Tiguan• Vehicle Production: Puebla, Mexico• 11” longer than outgoing Tiguan to house 3rd row seating• 3rd row seating standard on FWD models, optional on AWD• New customizable digital cockpit display allows drivers to choose data and Navigation configurations

• Better fills a gap below Atlas


Key LaunchesBMW 5-Series

• Production locations: Dingolfing, Germany & Graz, Austria• Substantial mass reduction versus prior offering (200lbs)• Length: 194.3 in. (+0.9*) Width: 73.5 in. (+0.3*)Height: 58.2 in. (+0.6*) Wheelbase: 117.1 in. (+0.2*)

• Technology from the recently launched 7-Series takes residence, eg gesture control

Lexus LS• Production location: Tahara, Atsumi, JPN• Length: 206.1 in. (+6.1*) Width: 74.8 in. (+1.0*)Height: 57.1 in. (-1.0*) Wheelbase: 123 in. (+6.1*)

• Optional Denso-supplied 24” color head-up display available.• Innovative safety package – pedestrian avoidance• No V8, twin-turbo V6 with 10 speed auto

*difference from previous generation


NAIAS 2017

• Key Launches

• Key Concepts

• Other Notables


Key Concepts

Chrysler Portal• Designed by Millenials, 270-mile EV range• FCA’s first real foray into autonomous or EV concept• Autonomous technology developed with suppliers• Well thought out vehicle interaction, tech for sharing content and personalization settings in the car

• Facial and voice recognition, exterior lighting conveys autonomous mode

Volkswagen I.D. Buzz• Fully-electric range up to 270 miles on the Modular Electric Drive (MEB) platform.

• Supports Volkswagen’s I.D. Pilot autonomous driving suite. –Turns yellow when in autonomous mode

• Electric all-wheel drive standard.• Longer than the T4 Bus, longer than the LWB T4.• Steering wheel retracts in autonomous mode.


Key Concepts

Nissan V-Motion 2.0• Length: 191.3 in. Width: 74.4 in. Height: 54.3 in. Wheelbase: 112.2 in.

• Evolution of Nissan’s V-Motion design language; expected to underpin the design of the next Maxima and Altima, indicating Nissan’s intent to remain committed to sedans.

• Will support ProPILOT autonomous driving mode, part of Nissan’s Intelligent Mobility Plan.

Infiniti QX50 Concept• Infiniti’s Powerful Elegance design language, introduced on the QX30

• Mid-size CUV, previews new-generation QX50.• Will support ProPILOT autonomous driving mode, part of Nissan’s Intelligent Mobility Plan

• New engine technology likely. VC-Turbo, variable compression turbo for diesel efficiency from gas engine


Key Concepts

Audi Q8 Concept• Based on MLB D platform – added to slate of large CUVs from Porsche, Audi and VW

• Based upon Q7 structure and technology suite – 90% ready• Length: 198 in. (-1.6*) Width: 80.4 in. (+2.9*)2018-22 Avg. Annual Volume: 29K

• New range topper CUV to share technology leadership with A8• Shown in 2+2 but available in 5 pass version

*difference from current Q7


NAIAS 2017

• Key Launches

• Key Concepts

• Other Notables


Other Notables

Ford F-Series MCE• 7 new front grills, 6 wheel options, updated lights and interior improvements to differentiate trim levels

• New Std. 3.3L V-6, and new 3.0L Powerstroke V-6 turbodiesel• All 2018 F-150’s will be equipped with standard Stop/Start and 10 speed auto (designed with GM)

• Improved lighting though few interior changes

Volvo V90• Production location: Torslanda, SWE (US models) Follows the V90 Cross Country – order only

• Length: 194.3 in. Width: 74.7 in.Height: 58.1 in. Wheelbase: 115.8 in.

• Available in FWD and AWD variations


Mercedes E-Series Coupe• Vehicle Production: Bremen, Germany (~50k UPA)• Increased: OAL +4.8”, wheelbase +4.4”• Twin Turbo 3.0L V6 – main US engine• ADAS: Semi-autonomous driver assist, high speed ACC• Will feature a 24” ICD display

Nissan Rogue Sport• Segment: Small C-Segment Crossover Utility Vehicle (CUV)• Platform: CMF-C/D averaging 2.7M UPA• Vehicle Production: Kyushu, Japan (90-100k UPA)• Gap filler – above Juke, below Rogue – essentially a Small C• Inspired by Rogue Select success• Nissan still skipping CarPlay/Android Auto

Other Notables


In Summary

• The US auto market is expected to remain healthy through the decade

• Autonomous vehicles and mobility services will change how we consume transportation—but that change may be slower than headlines might suggest

• NAIAS introductions largely favored family transportation—even some key concepts

© 2017 IHS Markit. All Rights Reserved.© 2017 IHS Markit. All Rights Reserved.

Thank You

Stephanie BrinleySenior Analyst, IHS Markit AutomotiveWorld Markets [email protected]

COPYRIGHT NOTICE AND DISCLAIMER© 2016 IHS. All rights reserved. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form withoutprior written consent of IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions ofauthorship. The information contained herein is from sources considered reliable, but its accuracy and completeness are not warranted, nor arethe opinions and analyses which that are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissionsor any loss, damage, or expense incurred by reliance on information or any statement contained herein. In particular, please note that norepresentation 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 forecastsand statements of belief noted herein. This presentation is not to be construed as legal or financial advice, and use of or reliance on anyinformation in this publication is entirely at your own risk. IHS and the IHS logo are trademarks of IHS.

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