Market Dynamics in a Global Automotive Supplier Industry

Transcription

1 Market Dynamics in a Global Automotive Supplier Industry Continental AG Davos, 18th. Jan Continental AG

2 Continental Corporation Overview 2011 Sales by division in % Since 1871 with headquarters in Hanover, Germany Sales of 30.5 billion Tires* 28% ContiTech 12% 163,788 employees worldwide 269 locations in 46 countries One of the top 5 in the automotive supplier industry Interior 20% Chassis & Safety 21% Powertrain 19% *pro forma Status: December 31, Continental AG

3 Continental Megatrends Doing more for safe mobility. for clean power. for intelligent driving. for global mobility. 3 Continental AG

4 Chassis & Safety Division 5 Strong Business Units and Product Portfolio 2011 Worldwide Sales: 6,5 Bn., Employees: Electronic Brake Systems Hydraulic Brake Systems Passive Safety & Sensorics ADAS Chassis Components Hydraulic electronic control units (HECU) - ABS - ESC Software functions - Adaptive cruise control - Regenerative brake system - Active front steering - Hill start assist, hill descent control - Deflation detection system - Hydraulic brake assist - Trailer stability assist Calipers and discs Drum brakes Brake hoses Boosters Tandem master cylinders Electric parking brakes Washer Systems Brake pressure regulators Electric vacuum pumps Wheel speed sensors Engine/transmission speed and position sensors Chassis sensors Sensor clusters Airbag control units Crash sensors Satellite for Electric Vehicles Pedestrian protection Occupant classification systems (OCS) Driver assistance systems - Radar -Lidar - Camera Chassis Electronics Electronic Components (1st tier customer) Suspension Systems 4 Continental AG

5 Globalization: Automotive Market Development in the Last 5 Years High Volatility with Increasing Share in Asia Mio. Units Light Vehicle Volume Development Worldwide RoW 50 43% 51% 40 Asia % Nafta 19% 10 32% Europe FC 24% 5 Continental AG * Source: Continental AG

6 How we Predicted the BRIC Market Development 5 Years ago The Growth in China is far Beyond the Forecast K Units % BRIC Light Vehicle Volume in 2012 Forecast in 2007vs. 2012FC -10% -2% +74% Brazil Russia India China Forecast in FC 6 Continental AG * Source: Continental AG

7 The Forecast in the Conference on The Real Development in China is much faster than the Forecast 7 Years ago Mio. Units Total Vehicle Volume Development in China Actual ,26 18,42 19, , Forecast in 2005 for Share of passenger car: 68% ,4 2,07 2,34 3,25 4,44 5,07 Share of passenger car: 45% 5, FC 7 Continental AG Actual Forecast * Source: China Association of Automobile Manufactures

8 China Automotive Market Experienced Turbulent Growth in last Years Growth Mainly Driven by Economic Development and also Stimulus Package Light Vehicles Mio. Units 20 48% Growth Rate YoY % 50% 16 Economic Crisis Stimulus Package 40% 12 31% 30% 8 20% 20%? 4 0 6% 3% 5% FC 10% 0% Source: IHS 8 Continental AG

9 Further Development of China Automotive Market Positive Demand Factors should Overcome the Negative Impacts Macro economy growth Increase disposable income Low vehicle density Further extension of infrastructure Strong growth in small cities Incentives for EV&HEV Insufficient infrastructure Restriction in big cities Increasing operating cost Increasing oil prices Increasing environmental issues Competitiveness of COEMs 9 Continental AG

10 Rapid Increase of China Automotive Market Provides Growth Opportunities Chinese Local OEMs Prefer German Production Lines Example GWM K units Continental AG Source: IHS

11 Chassis & Safety Division Footprint in Asia We are Aiming to Further Increase the Sales Share in Asia to >33% by 2016 Test center Heihe Sales by region in % 2011 RoW 75% Asia 25% Sales by region in % 2016 RoW <67% Asia >33% 3 Technical Centers 4 R&D Locations 3 Test Tracks 11 Production Locations Test center Monbetsu Changchun Technical center Jiading Test center Asahi Shanghai Technical center Bangalore Seoul Cheongwon Icheon Technical center Yokohama 11 Continental AG

12 Comparison China vs. India: Automotive Market India will take longer Time than Expected to be the Next China units Light Vehicle Volume Development units C-Segment B-Segment Best Selling Cars 2012 YTD Oct Maruti Suzuki Alto Selling Price: SGM Buick Excelle Selling Price: Maruti Suzuki Swift Selling Price: FAW-VW Jetta Selling Price: Source: IHS, 12 Continental AG

13 Comparison China vs. India: Infrastructure & Safety Technologies India will take longer Time than Expected to be the Next China Mumbai Shanghai 100% Airbag Installation Rate Development 100% EBS Installation Rate Development 80% 80% 60% 40%? India* China 60% 40% India China 20% 20% 0% * Prerequisite: Legislation? % Continental AG

14 Technology Generates Growth Opportunities The Vision of Accident-Free Driving (Vision Zero) Number of Traffic Fatalities in Thousands Safety Technology Seat Belt ABS Airbag ESC ADAS Car Safety Technology vs. Traffic Fatalities Development in Germany Number of Passenger Vehicles in Millions We are convinced that innovative technologies will make it possible to one day drive a car without any accidents in all vehicle categories and markets of this world. 14 Continental AG

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16 Technology Generates Growth Opportunities Example ADAS World worldwide Wide Market Growth (Mrd. ) ) of Advanced of Advanced Driver Driver Assistance Systems 12,0 10,0 8,0 CAGR* ( 10-20): 33 % 6,0 4,0 2,0 0, * Market estimation of Continental Market Definition: All comfort and safety vehicle control, driver warning and information systems applying surrounding sensors except short range distance monitoring systems based on ultrasonic sensors ADAS Drivers - Market Growth including Fitment rate increase - Legislation - Consumer Ratings (Euro NCAP, NHTSA) - Additional Functions (360, rear viewing) 16 Continental AG

17 Production Systems Classification low Investment high high Product Variants low Productivity Manual Assembly Hybrid Assembly Automated Assembly Flexibility low Capacity high high Cycle Time low source: B. Lotter 17 Continental AG

18 Production Systems Classification Examples at Continental 18 Continental AG

19 Production Systems Classification Lowest Cost Production India vs. Full Automation Frankfurt 19 Continental AG

20 Process-Technology for highest Competitiveness Surface Mount Technology => AOI Inspection of QFP 20 Continental AG

21 Process-Technology for highest Competitiveness Laser Welding Technology in Valve Production 21 Continental AG

22 Uncertain and Unpredictable Times need Highest Agility In all Areas of the Company Vehicle Volumes (LVPF in mn) Raw Material Price (e.g. Rare Earth) 80? USD/kg Nd Export* Asia Nafta 20 Europe FC? Currency Fluctuation (Eur/USD) Political Risks/Environmental Accidents North Africa Iran, N. Korea Thailand Flood? Japan Earthquake, Tsunami, Nuclear disaster? 22 Continental AG *Source:

23 Unpredictable Economy Cycles are the Rule! Require Highest Agility to be well Prepared Against Market Dynamics?? Sales?? FC 2013ff Preparation for Growth Cost Cutting Stabilization Preparation for Growth with Highest Agility We never know the future but we have to be better prepared! 23 Continental AG

24 Business Agility: To find the Right Balance will make the Difference Success Factor for C&S Division & for the Production Systems Suppliers Growth in New Markets, with New Products Value Creation Supply chain, Project management, Product quality, etc. Customer Satisfaction Business Agility Technology Leadership Innovation & Development process, etc. Business Agility is the capability to optimize the balance between (1) Customer Satisfaction, (2) Technology Leadership and (3) Value Creation in a dynamic business environment. 24 Continental AG

25 Drivers and Challenges For Production Systems Suppliers Globalization - global OEM footprint and worldwide platforms are forcing competition - automotive suppliers are following OEM footprints - regional requirements in emerging markets (BRIC) => adaptation of equipment Agility in Volatile Markets - strong volatility in customer volumes (strong increases fast decreases) - lean production systems needed with short realization timings - high flexibility & scalability of production equipment Standardization - high standardization of equipment needed (relocations, maintenance, ) - worldwide quality demands independent from production system - increasing demands towards locally sourced equipment (India, China) 25 Continental AG

26 Requirements For Production Systems Suppliers Planning Phase - Evaluation and standardization of key-processes and machine designs - Close cooperation with suppliers (key-suppliers), closed loop => design - Financial requirements: investment, automation vs. labor depending, spending Industrialization phase - Easy installation process, plug & play, modularity and scalability - Know-how transfer from central planning IE / lead plant / equipment supplier to production locations Training & Coaching phase - Intensive training before SOP (e.g. at supplier shopfloor during release) - Training of troubleshooting, maintenance, quality engineering - Training of product specific processes / on the job training Production phase - Regularly process audits (defined by IE & supplier) - Clearly defined support process (e.g. 24/7 hotline, fast reaction timings, ) 26 Continental AG

27 Global Opportunities Thinking Global and Acting Local 27 Continental AG

28 Thank You for Your Attention 28 Continental AG