2016 OESA Annual Conference The Industry at a Crossroads

Transcription

1 2016 OESA Annual Conference The Industry at a Crossroads

2 Leading Through Uncertainty

3 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. Leading Through Uncertainty A panel discussion with OESA members Xavier Mosquet, Senior Partner and Managing Director November 2,

4 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. Our panelists Donald Hampton Jr. President Interior Systems NA Ramzi Hermiz President and CEO Jim Zizelman Vice President Engineering 4

5 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. What are the main uncertainties over next years? Difficulty in mitigating 1 Management Regulation Emission regulations Access to talent 5.5 Powertrain electrification Technology challenges Managing cybersecurity Growth in car sharing 3 Emergence of autonomous vehicles Affordability of cars/light trucks Industry risks Customer purchasing & planning complexity Quality management Emergence of connectivity Impact to business Q: When considering the next years, rate each of the following risks in terms of impact to your business. When considering the next years, rate each of the following risks in terms of difficulty in mitigating. Rating scale for both impact and mitigation is 1-9, with 9 being very high impact and very difficult to mitigate Source: OESA member survey, N =

6 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. 1 Management How will automakers continue to attract the right talent? Metro areas Annual growth of Advanced Industry jobs Rank of open jobs requiring STEM 1 (out of 100 metro areas) Nashville, TN Louisville, KY Detroit, MI Austin, TX San Francisco, CA Raleigh / Durham, NC Charlotte, NC Albany, NY Denver, CO Seattle, WA Silicon Valley, CA Boston, MA NYC, NY Baltimore, MD San Diego, CA St. Louis, MO Hartford, CT Washington, DC Colorado Springs, CO Bridgeport, CT Palm Bay, FL -1.5% -0.5% -0.6% 0.9% 0.8% 0.7% 1.8% 1.5% 2.4% 2.3% 4.5% 4.2% 4.2% 4.1% 5.3% 5.2% 4.9% 8.5% 7.6% 7.4% 6.6% / 7 (2) High growth, limited tech need High growth, high tech need Lower growth, high tech need CAGR, (%) 1. STEM = Science, Technology, Engineering, or Math; also requires a Bachelor's degree or higher 2. Raleigh / Durham have separate rankings in terms of job opening but combined annual advanced industry job growth; Source: Source: Brookings Institution - "Still Searching: Job Vacancies and STEM Skills" and "America's Advanced Industries What They Are, Where They Are, and Why They Matter" 6

7 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. 2 Regulation Will OEMs meet the consumers' desired price for EVs? Would you purchase an environmentally friendly car if NEV sales by country % of respondents 60 56% 207 EV market share 1.0% 40 38% % % %... you have to pay more over the life of the vehicle... you pay more upfront but make it back over time $4,600 $3, yrs Not willing to pay more upfront Upfront premium Payback period Source: BCG Consumer Barometer March 2011, N = 1,027 in US, N = 5,016 in Europe; BCG Automotive Survey of car owners and intenders in China N = 550; OECD-IEA BEV PHEV Units (000's) 23.3% 1.0% 0.7% 1.2% 2.4% 7

8 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. 3 Industry risks New York City Case Study Car sharing: The economics of robot-taxis Potential business case for robo-taxis to replace vehicles in mega cities Total cost per passenger mile in NYC 1 (US$) Average occupancy Public transport Vehicle ownership Taxi Robotaxi n.a Impact of shorter wait / commute times and convenience not built in Source: US DOT, NYC MTA, NYC Taxi & Limo commission, KBB, BCG analysis 8

9 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. 4 Technology challenges A base scenario for autonomous vehicles Penetration of new vehicle sales (%) (in addition to ADAS feature penetration) penetration Partial AVs: 12.4% Fully AVs: 0.5% 2035 penetration Partial AVs: 15.0% Fully AVs: 9.8% Share (%) 2025 global sales Volume (M) Estimated global new light vehicle sales: ~111M 2 Share (%) 2035 global sales Volume (M) Estimated global new light vehicle sales: ~122M % % % % 12.0 Partial AV Highway autopilot Autonomous valet parking Traffic jam autopilot Urban autopilot Fully AV 1. Based on adoption rate of Adaptive Cruise Control ADAS feature and Cruise Control following introduction of first feature within any category (ACC and Auto Parallel Park for ADAS in 2006, Single Lane Highway Autopilot for partial AV in 2016, and full AV introduction in 2025; AV categories reach 25% market cap per cost and consumer willingness economics; 2. Based on IHS forecasts through 2026; 2027 through 2030 based on CAGR and then steady volume from Source: just-auto Jul-2014 market analysis, LMC Automotive, IHS Global Standards, BCG analysis 9

10 OESA Annual Conference Opening Presentation vff 16x9.pptx Copyright by The Boston Consulting Group, Inc. All rights reserved. 4 Technology challenges Many factors may impact penetration of fully autonomous vehicles Scenario Description Expected penetration of new car sales (%) 1 Base case Interest in AV leads to down-selection of other features (example: smaller engines) to better match consumers' overall willingness to pay No frills Interest in AV leads to down-selection of other features (example: smaller engines) 1 to better match consumers' overall willingness to pay Payback Benefits and market perception of increased fuel economy and lower insurance premiums make fully AV ownership more attractive Droogle ("Drone + Google") Societal shift toward car sharing and market acceptance of AVs over time drives mass scale change in big-city car ownership models (e.g., robo-taxi) Regulation Environmental benefits of fuel economy and safety benefits of fewer traffic incidents drive regulations after ~8 years of fully AVs being introduced Backlash Incident (example: cyber security) with AVs adversely impacts consumer perceptions and significantly limits demand Very low Based on 40% of unserved interested consumers trading off other features (e.g., engine size) for AV 2. 50% of interested consumers perceive fuel efficiency and insurance savings benefits; 4. Large cities shift to robo-taxi car sharing; near 100% adoption of AVs based on change in ownership structure. 3. US, Western EU and Japan pass regulation after ~8 years; Source: IHS global standards, Ward's Automotive, just-auto, 2014 BCG US survey, AAA Your Driving Costs Study; US News 2012,Green Home Authority, VPTI, UN ESA, BCG analysis 10

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12 Leading Through Uncertainty Donald Hampton Jr. President, Faurecia Interior Systems North America

13 Leading Through Uncertainty Ramzi Hermiz President & CEO, Shiloh Industries, Inc.

14 Leading Through Uncertainty James Zizelman Vice President, Engineering, Delphi

15 Leading Through Uncertainty Donald Hampton Jr. President, Faurecia Interior Systems North America Ramzi Hermiz President & CEO, Shiloh Industries, Inc. James Zizelman Vice President, Engineering, Delphi Moderator: Xavier Mosquet Senior Partner & Managing Director The Boston Consulting Group (BCG), Detroit

16 2016 OESA Annual Conference The Industry at a Crossroads