MEXICO AUTOMOTIVE OUTLOOK

Transcription

1 Information Analytics Expertise AUGUST 7, 2014 MEXICO AUTOMOTIVE OUTLOOK Land of Promised Plants Guido Vildozo, Manager Latin America Light Vehicle Sales Forecasts, IHS / ALL RIGHTS RESERVED

2 Agenda Global Outlook US Sales NAFTA Production Mexico Production Domestic Market Key Takeaways 2

3 Jun-2005 Sep-2005 Dec-2005 Mar-2006 Jun-2006 Sep-2006 Dec-2006 Mar-2007 Jun-2007 Sep-2007 Dec-2007 Mar-2008 Jun-2008 Sep-2008 Dec-2008 Mar-2009 Jun-2009 Sep-2009 Dec-2009 Mar-2010 Jun-2010 Sep-2010 Dec-2010 Mar-2011 Jun-2011 Sep-2011 Dec-2011 Mar-2012 Jun-2012 Sep-2012 Dec-2012 Mar-2013 Jun-2013 Sep-2013 Dec-2013 Mar-2014 Jun-2014 Light vehicle sales Millions World auto sales on a roll Auto Demand Trends- Wobbles or bigger worries/ July 2014 World Sales on a roll But the strong climb has tapered off in recent months World SAAR and Trend World Without China, SAAR and Trend Source: IHS July 14 3

4 L,V, Sales in millions Auto Demand Trends- Wobbles or bigger worries/ July 2014 Where the auto sales momentum was last year All the Growth was in the worlds two biggest markets, Europe better than feared, EM s already fading Million 79.6 million 14.7% +2.7 million 7.3% -0% -0% 1.5% - 0.6% -4% -1.8% +1.2m -16K -15K 96K -30k -190K -230K 4.5% +3.6M 83.2 million Greater China North America Japan/ Korea South Asia South America Central/ Eastern Europe Middle East/ Africa Western Europe 2013 Source: IHS 4

5 Jan'07 Jan'08 Jan'09 Jan'10 Jan'11 Jan'12 Jan'13 Jan'14 Seasonally Adjusted Selling Rates Indexed 2007=1 Region light vehicle selling rates China remains on different path than other developing markets ASEAN C Europe E Europe Gr China India Japan Korea Mid-East/Africa N America S America W Europe GC Sales Level Lehman Collapse AS IN SA JK MEA NA EE WE CE 0.4 Source: IHS Analysis, X12 Seasonal Adjustment

6 L,V, Sales in millions Million units Where the auto sales growth is for 2014 Now all three of the worlds biggest markets help (for the first time since 2007).but EM s turn down % % -1% % % +4% -7.8% % 85.4 million % +2.2M million Greater China North America West Europe Middle East/Africa July 14 South Asia Japan/Korea South America Central/East Europe

7 Percent of responses Auto Demand Trends- Wobbles or bigger worries/ July 2014 The financial markets are questioning if emerging market weakness is more than just fall-out from tapering What is the most important risk to financial markets in the next 12 months? Q Q Eurozone tensions Fed policy withdrawal Weak Developed Market Growth Weak China/EM Growth Geopolitics Source: Barclays Research - Quarterly Survey of Financial Institutions, other risks not included 7

8 Light vehicle sales Millions Global Light Vehicle Sales Auto Demand Trends- Wobbles or bigger worries/ July 2014 Long term forecast has been lowered despite sales overshoot in Current July Source: IHS July 14 8

9 Light vehicle sales Millions Auto Demand Trends- Wobbles or bigger worries/ July 2014 Forecast Evolution- Reflecting a slower pace of economic reforms in many EM economies Potential of BRIC s and ROW markets lowered, Mature Triad Markets get some momentum TRIAD BRIC ROW TRIAD Jun-13 BRIC Jun-13 ROW Jun-13 Notes: Triad is Traditionally US, WE and Japan ( this chart also includes Canada and Korea) Source: IHS July 14 9

10 TTIP- Transatlantic Trade and Investment Partnership US-EU FTA negotiations are ongoing Economy US EU 47% of world GDP and 35% of global auto sales Estimates a strong FTA could eventually add 0.4 to 0.5% p.a. to US and EU GDP - if so vehicle sales could be 1/2m units higher in the combined block Tariff Free Vehicle Flows Probable total elimination of all Bi-lateral auto tariffs on built up vehicles likely phase in period for trucks (LCV and PUP s) Harmonized standards Components / Supply Chain Enhanced compatibility of regulations and standards more likely than harmonising to same standards (ACEA estimate this to be equivalent to monetary tariff of 26%) Mutual acceptance of safety standards is key issue Can it slow or reverse off-shoring of component sourcing on both sides of the Atlantic? Current trade is quite small -US Exports $5Bn to EU, Imports about $14Bn from EU

11 Light vehicle sales Auto Demand Trends- Wobbles or bigger worries/ July 2014 Contingency Planning Forecasts :- But what if current EM weakness spirals into recession? Global Auto Sales : Alternative Forecasts for Contingency Planning 120,000, ,000, ,000,000 Baseline Optimistic Pessimistic Consumer rebound everything goes right Volume sensitivity for 2015 auto sales vs base Region Pess. Case World -7% 90,000,000 WE -3% 80,000,000 70,000,000 Taper panic grows EM weaknesses exposed topple not just wobble NA -5% China -8% 60,000,000 50,000,000 EE -14% SA -15% SE Asia -12% In Pessimistic case World GDP falls to below 2% in 2014 and just 2.5% in 2015 Source: IHS Quarterly service for contingency forecast planning Vehicle Production and Sales 11

12 Agenda Global Outlook US Sales NAFTA Production Mexico Production Domestic Market Key Takeaways 12

13 Intention to Buy New Vehicle in 6 Months (Percent Yes) Not just a needs based recovery, but wants driven Conference Board Month Moving Average Actual 13

14 Auto Loans Delinquency Rates 4.0 (% - Accounts past due 30 days or more) The first uptick in dealer delinquency rates in a year Direct (Bank) Loans Indirect (Dealer) Loans Source: American Bankers Association Months 14

15 New Vehicle Buyers - Average Credit Score Avg. Score 25% 23% 21% 19% 17% 15% 13% 11% 9% 7% 620 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 5% FICO SCORE % UNDER 670 Source: CNW Marketing 15

16 New Vehicle Sales By Credit Score 25% Subprime credit has started to become available 20% 15% 10% 5% 0% Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Source: CNW Marketing Near Sub 619 Months 16

17 New Auto Loan Application Approvals 85% Growth in jobs will return loan approvals back into the seventies 80% 75% 70% 65% 60% 55% Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Source: CNW Marketing Unweighted Average of Prime, Near and Subprime Months 17

18 Incentives to MSRP 25 (Percent) Incentives activity is still under control CNW Marketing Months

19 Residual Value Index 100% Residual values are strong for all manufacturers, the playing field is level (Index = Lease contract residual value versus CNW estimate of residual at end of lease term) 90% 80% 70% 60% 50% 40% 30% Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 GM Ford Chrysler Industry Toyota Honda Nissan Source: CNW Marketing Months 19

20 U.S. New Light Vehicle Sales Lease Penetration (Share) 30% Lease activity is close to where it should be 28% 26% 24% 22% 20% Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Source: CNW Marketing Leases by Month 20

21 U.S. New Light Vehicle Inventory Days Supply Incentives will get rid of unwanted inventory, not production cuts 120 (Days Supply) Light Trucks Cars Months Seasonally Adjusted 21

22 U.S. Light Vehicles Scrappage (Units / Thousands) 6.0% % % % Total Vehicles Scrapped - L % of PARC - R 22

23 United States Light Vehicle Sales, SAAR June s SAAR was the best single month selling rate since July 2006 (Units in Millions) Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan ACTUAL

24 Light vehicle sales Millions United States Auto Demand Trends- Wobbles or bigger worries/ July 2014 Broaden tax base, consumption tax s Structural reform agenda* Education to reduce income inequality Pent up demand played out Financial regulation IHS Forecast from Notes: * Reform agenda based on prescriptions by OECD Going for Growth 2012 Source: IHS July 14 24

25 U.S. Light Vehicle Sales: Relative to Employment 19% (Percent) 17% 15% 13% 11% 9% 7% Non-farm Payroll Linear (Non-farm Payroll) 25

26 U.S. Sales Manufacturers Market Share (Light Vehicle Share) 24% Market share is wide open and up for grabs 20% 16% 12% 8% 4% GM FORD CHRYSLER/FIAT TOYOTA HONDA NISSAN HYUNDAI/KIA 26

27 U.S. Sales Manufacturers Market Share 6% (Light Vehicle Share) 5% 4% 3% 2% 1% 0% HYUNDAI KIA SUBARU MAZDA MITSUBISHI VW GROUP 27

28 Agenda Global Outlook US Sales NAFTA Production Mexico Production Domestic Market Key Takeaways 28

29 Exports Expansion Localization Millions N. America - LV Sales and Production Post Restructuring Sales Production From , regional sales eclipse output by 27% or 3.7 million units , future sales levels outpace production by less than 8.0% or by ~1.25 million units Positive sales trajectory tapers after peak in 2017 Long-term output nears 18.5M units far surpasses 16.0M unit pre-2009 levels 29

30 Output (Millions) North American Market Structure United States Mexico Canada Change 50% 18 40% 16 30% % 10% 0% Y-O-Y % Change CAGR 1.2% 6-10% 4-20% CAGR 6.2% % -40% CAGR -3.6% 30

31 North America Light Vehicle Production 2013 vs 2014 OEM 2013 (000s) 2014F (000s) % Units (000s) GM 3,287 3, % 89 Ford 3,080 3, % -60 Chry/Fiat 2,509 2, % 240 Detroit 3 8,876 9, % 269 Toyota 1,863 1, % 97 Honda 1,782 1, % 47 Ren/Nissan 1,470 1, % 248 Hyundai % -2 Asian 4 5,884 6, % 389 VW % -28 BMW % 51 Daimler % 41 German 3 1,157 1, % 65 Others % 119 Total 16.2M 17.0M 5.2% ~842 Healthy production growth rate as recovery progresses Ford Down time for F- 150 and 2015 programs and less exports (MEX) Chrysler Fiat-based product ramps-up Nissan Migration of CUV production; Mexico expansion Honda and Mazda start new operations in Mexico! Source: IHS Automotive Light Vehicle Production Forecast 31

32 Millions North America Light Vehicle Production Growth Prospects German Others Asian 4 Chrysler/ Fiat Ford General Motors Source: IHS Automotive Light Vehicle Production Forecast Production outlook follows demand recovery with import substitution and export activity providing additional support Most manufacturers are poised to post gains; favors OEMs with further capacity expansion plans: BMW, VW, Nissan, Toyota & Honda Global product/platform strategies enable competitive sourcing shifts 32

33 North American Vehicle Exports (Millions) North America Light Vehicle Production Exports bolster prospects North American Vehicle Exports by Region Europe South America Middle East/Africa Greater China Other Greater use of global platforms allows for more export ready product 40+ Free trade agreements drive Mexican output Expansion of luxury segment capability across the region into Mexico EU sovereign debt crisis tempers EU exports, yet BRIC demand grows Sourcing patterns favor NA expansion as a safe haven; with currency hedge & export prospects Source: IHS Automotive Light Vehicle Forecast 33

34 Agenda Global Outlook US Sales NAFTA Production Mexico Production Domestic Market Key Takeaways 34

35 Mexico Light Vehicle Production More growth to come (Millions of units) Forecast at risk due to Brazil PROD

36 North American Vehicle Exports (Millions) North America Light Vehicle Production Exports bolster prospects Mexico Vehicle Exports by Region Europe South America Middle East/Africa Asia North America Greater use of global platforms allows for more export ready product 40+ Free trade agreements drive Mexican output Expansion of luxury segment capability across the region into Mexico SA exports hurt by Brazil and Argentina Source: IHS Automotive Light Vehicle Forecast Sourcing patterns favor NA expansion as a safe haven; with currency hedge & export prospects 36

37 Global Top 10 Production Countries China China China China 2 Japan United States United States United States 3 United States Japan Japan Japan 4 Germany Germany Germany India 5 South Korea South Korea India Germany 6 India India South Korea Mexico 7 Brazil Mexico Brazil Brazil 8 Spain Brazil Mexico South Korea 9 Mexico Thailand Spain Thailand 10 France Canada Thailand Spain Mexico is definitely on the industry s radar Will continue to ascend among Top 10 in the time period Could build more than Brazil! 37

38 Agenda Global Outlook US Sales NAFTA Production Mexico Production Domestic Market Key Takeaways 38

39 Mexico Light Vehicle Sales SAAR vs. Consumer Confidence 1200 Thousand Units Index LV Sales (left scale) Consumer Confidence 39

40 Millions Mexico Light Vehicle Sales More manufacturing bring us to new highs? Units Forecast calls for increased competition and more credit 35% 25% % 1.0 5% 0.9-5% % % Light Veh -L Annual Change -R -35% 40

41 Mexico Light Vehicle Sales Market Share 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Percentage Nissan, GM and VW will face competition 0% Others Mitsubishi Daimler Suzuki BMW Mazda Honda Toyota Ford Fiat Volkswagen General Motors Renault/Nissan

42 C S E D A N Mexico OEM Positioning for Strategic Segments Renault/Nissan Volkswagen Toyota Mazda C S U V Honda Renault/Nissan Fiat Toyota General Motors Ford B S E D A N General Motors Ford Volkswagen Honda Toyota A H A T C H General Motors Fiat Daimler Ford Volkswagen B H A T C H Volkswagen Renault/Nissan Ford Suzuki Honda B S U V General Motors Ford Renault/Nissan Suzuki Fiat 42

43 Millions Mexico Light Vehicle Sales Global Segmentation 0.70 Units A B C D E F HVAN

44 Millions Mexico Light Vehicle Sales Bodystyle 0.60 Units

45 Agenda Global Outlook US Sales NAFTA Production Mexico Production Domestic Market Key Takeaways 45

46 Key Takeaways Global growth is driven by TRIAD as opposed to emerging nations in 2014 US Sales in 2014 will present road map for future years NAFTA production looking healthy and exports will grow Mexican domestic market is showing signs of major slowdown Production investments see fruition in 2014! We are now a 3 million unit market quickly ascending to 4 million units! Continues to rely heavily on the US Domestic market, Colombia, Chile and Peru are promising Luxury Segment is key 46

47 Thank You for Your Participation! Guido Vildozo Manager, Latin America Vehicle Sales

48 For more information, please contact IHS Customer Care (IHS CARE) +44 (0)