Budget Cars How Big an Opportunity for Whom and Where? Christoph Stürmer Director, Product Development

Transcription

1 Budget Cars How Big an Opportunity for Whom and Where? Christoph Stürmer Director, Product Development

2 Presentation Outline Background Global Market Growth Cheap Cars of the World Low-Cost Cars Strategic Targets Business Models Opportunities Where? For Whom? 2

3 Small Car Segments Drive Global Sales Growth Millions % 39% 38% 37% 36% 35% 34% 33% 32% 31% 30% 29% C1 B A Small Share (RHS) 3

4 Sales in Non-Triad Areas Will Outgrow Triad Sales Millions Sales of A, B and C1 Segments NON-TRIAD TRIAD 4

5 The Largest Growth Is in China and India Sales of A, B and C1 Segments POLAND GERMANY MALAYSIA THAILAND RUSSIA BRAZIL IRAN UNITED STATES INDIA CHINA Millions 5

6 What Do People Get Today in These Segments? Western Europe: Smart for-two 6

7 What Do People Get Today in These Segments? Russia: Lada 2105 (Nova) 7

8 What Do People Get Today in These Segments? India: Maruti Alto 8

9 What Do People Get Today in These Segments? Brazil: Fiat Mille 9

10 Strategic Target: To Generate Additional Sales Volume by Offering New Vehicles at Very Low Prices Sales Price Downsizing Substitution Existing entry level Downscaling Downgrading Existing entry level Vehicle Functionality 10

11 Business Model: Reduction of Cost per Vehicle Development designs Use low-cost engineering Simplify concept design Co-design with Sourcing components Source from low-cost suppliers Simplify component features Co-source with Production facilities Use low-cost locations Concentrate mass Co-produce with Alternative Strategies Possible Decisions Have to Be Made! 11

12 Business Profile: Dacia Logan Development designs Use low-cost engineering Simplify concept design Co-design with Sourcing components Source from low-cost suppliers Simplify component features Co-source with Production facilities Use low-cost locations Concentrate mass Co-produce with Sales Price: 7,500 15,000 12

13 Business Profile: Tata 1-Lakh Car Development designs Use low-cost engineering Simplify concept design Co-design with Sourcing components Source from low-cost suppliers Simplify component features Co-source with Production facilities Use low-cost locations Concentrate mass Co-produce with Sales Price: $2,500 $5,000 13

14 Business Profile: VW New Small Family Development designs Use low-cost engineering Simplify concept design Co-design with Sourcing components Source from low-cost suppliers Simplify component features Co-source with Production facilities Use low-cost locations Concentrate mass Co-produce with Sales Price: 9,000 12,000 14

15 Business Profile: Toyota Aygo Development designs Use low-cost engineering Simplify concept design Co-design with Sourcing components Source from low-cost suppliers Simplify component features Co-source with Production facilities Use low-cost locations Concentrate mass Co-produce with Pre-tax sales price: 7,500 11,500 15

16 Groups of Target Markets Market Class Mature Emerging Developing Characteristics High per-capita income Full infrastructure Car market & parc near saturation Fully developed automotive industry Broadly growing per-capita income Developing infrastrcuture Existing car market and auto industry Selectively growing percapita income Underdeveloped infrastructure Basic mobility market Emerging automotive industry Examples Triad markets Russia India Brazil China 16

17 Assumed Functionality Requirements Urban Clientele Vehicle as small as possible optimized for parking and narrow/crowded roads 2 4 passengers plus minimum luggage Low-emissions engine, automatic transmission Chassis optimized for quick professional repairs, i.e. parking dents Rural Clientele Vehicle as big as possible optimized for hauling people and/or gear 5 7 passengers OR massive transport capability (1/2 t) All-burner engine and all-terrain suspension Construction optimized for maximum durability and ease of DIY repairs 17

18 Existing Entry Car Offers Vary Widely by Region and Target Group Market Class Mature Emerging Developing Smart for-two Daewoo Matiz Maruti Alto Urban Clientele BMW Mini Lancia Y VW Gol Fiat Uno BYD Flyer Chery Qiyun 10,000 15,000 $7,500 $15,000 $5,000 $7,500 Fiat Punto (old) Dacia Logan Motorbikes Rural Clientele Renault Clio (old) Daewoo Matiz Lada Nova Fiat Palio Threewheelers Mini-Trucks 8,000 10,000 $4,500 $10,000 $1,000 $5,000 18

19 Opportunity Profile: Dacia Logan Market Class Mature Emerging Developing Smart for-two Daewoo Matiz Maruti Alto Urban Clientele BMW Mini Lancia Y VW Gol Fiat Uno BYD Flyer Chery Qiyun 10,000 15,000 $7,500 $15,000 $5,000 $7,500 Substitution Fiat Punto (old) Dacia Logan Motorbikes Rural Clientele Renault Clio (old) Daewoo Matiz Lada Nova Fiat Palio Threewheelers Mini-Trucks 8,000 10,000 $4,500 $10,000 $1,000 $5,000 Substitution Substitution 19

20 Opportunity Profile: Tata 1-Lakh Car Market Class Mature Emerging Developing Smart for-two Daewoo Matiz Maruti Alto Urban Clientele BMW Mini Lancia Y VW Gol Fiat Uno BYD Flyer Chery Qiyun 10,000 15,000 $7,500 $15,000 $5,000 $7,500 Downsizing Fiat Punto (old) Dacia Logan Motorbikes Rural Clientele Renault Clio (old) Daewoo Matiz Lada Nova Fiat Palio Threewheelers Mini-Trucks 8,000 10,000 $4,500 $10,000 $1,000 $5,000 Substitution 20

21 Opportunity Profile: VW NSF Market Class Mature Emerging Developing Smart for-two Daewoo Matiz Maruti Alto Urban Clientele BMW Mini Lancia Y VW Gol Fiat Uno BYD Flyer Chery Qiyun 10,000 15,000 $7,500 $15,000 $5,000 $7,500 Downscaling Substitution Fiat Punto (old) Dacia Logan Motorbikes Rural Clientele Renault Clio (old) Daewoo Matiz Lada Nova Fiat Palio Threewheelers Mini-Trucks 8,000 10,000 $4,500 $10,000 $1,000 $5,000 21

22 Opportunity Profile: Toyota Aygo Market Class Mature Emerging Developing Smart for-two Daewoo Matiz Maruti Alto Urban Clientele BMW Mini Lancia Y VW Gol Fiat Uno BYD Flyer Chery Qiyun 10,000 15,000 $7,500 $15,000 $5,000 $7,500 Substitution Fiat Punto (old) Dacia Logan Motorbikes Rural Clientele Renault Clio (old) Daewoo Matiz Lada Nova Fiat Palio Threewheelers Mini-Trucks 8,000 10,000 $4,500 $10,000 $1,000 $5,000 Downsizing 22

23 Forecasts for Selected New Low-Cost Car Projects Millions VW VW NCS VW CITY EXPERT TOYOTA SMALL CAR TOYOTA ENDO TATA MICROCAR NISSAN A-CAR MARUTI NEW ALTO FIAT UNO SUCCESSOR DACIA LOGAN 23

24 Conclusions: Low-Cost-Cars Are No Passe-Par-Tout Target Markets and Entry Strategies vary widely The entry point into a market is determined not only by price, but also by mobility patterns, regulations, social structures, infrastructure, consumer habits... The same car can have different functions in different markets but some functionality/target combinations are mutually exclusive! The success in each market sector is determined by product and price fit The success of the overall project is determined by fitting the right business model to a correctly sized revenue stream Key strategy: scaleable business models that is the Logan lecture 24

25 Thank You Christoph Stürmer Director, Product Development