Interactive presentation: Automotive sector outlook

Transcription

1 Interactive presentation: Automotive sector outlook Thomas Steinberger, PwC To take part, visit tiny.cc/dwgermany18 on your browser

2 Automotive Disruption Trends, Technology and Impacts September 2018, Debtwire Conference 2

3 Global Growth

4 Automotive is still a growth industry just not everywhere anymore Global Light Vehicle Assembly: 2009 vs vs (millions) m Additional production volume m 3 Additional production volume Total CAGR* % CAGR* % Triad 3.4% 1.4% 40 China 9.0% 5.1% Annual growth: 6.9% +4.9m per year Annual growth: 2.8% +2.8m per year ROW 4.9% 5.2% 2009 Triad China ROW 2016 Triad China ROW 2023F Source: Autofacts 2017 Q3 Forecast Release Triad = EU, NAFTA, Japan *Compound Annual Growth Rate 4

5 China will be the global growth engine SUVs as the main driver and the largest segment forward Light Vehicle Assembly in Key Markets F (Index, Base year 2010 = 100) China NAFTA EU China: Light Vehicle Assembly by Vehicle Concept F (millions) Growth 17-24F: Pickup: +19,7% Van: +24,4% Car: +26,8% SUV: +41,4% F 2020F 2022F 2024F F2019F2020F2021F2022F2023F2024F Source: Autofacts 2018 Q1 Forecast Release F China 15,7 million 35,8 million NAFTA 11,9 million 19,2 million EU 16,3 million 21,1 million 5

6 User in the spotlight

7 It s gonna be so eascy the five dimensions of the automotive transformation shared autonomous a s c connected electrified e y yearly updated 7

8 Would you use autonomously driving cars? 8

9 People would use autonomously driving cars... Germany USA China... now 7%... never 46% 13% 24% 28% 4% Potential Market 54% 72% 96% 9

10 Would you share cars with other people? 10

11 Automotive Trends - Debtwire Conference PwC 11

12 When asked to share a car with others people would... Germany USA China... share it 26% 16% 36%... don t share it 43% 36% 16% Missing percentage from people being undecided. Potential Market 57% 64% 84% 12

13 Which features should your next car have? 13

14 Features the next vehicle must have Germany USA China Electric Drive 19% 10% 26% Autonomous Drive 10% 12% 37% Online Features 30% 29% 56% 14

15 When do you expect relevant (+25%) market shares for highly autonomus and electric vehicles? 15

16 Major impact from new technologies beyond 2025 Europe: Autonomous levels (in %) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Autonomous level Europe: Powertrain distribution (in %) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Verbrenner Combustion Hybrid Electric 16

17 How will shared services influence the size of the future car parc in Europe? 17

18 In Europe, the total car parc could decrease by as much as 29% Car parc in million -29% Sharing Services

19 What will happen?

20 Electrification and autonomous technologies driving the disruption in the industry 1 Enablers of transformation Motivators of transformation 2 connected + electric Push Pull autonomous + shared 20

21 Starting in Europe, we will see significant changes within the combustion engine 1 Average Engine Displacement 2017 vs 2024F (cubic centimeters) Vehicle Propulsion 2017 vs 2024F (percentage share) 1,750 1,740 1,730 Smaller Engines Hybrid (Mild + Full) 2.0% PHEV Electric ,720 1, F 2021F 2023F Less Cylinders Diesel 46.3% 49.1% Gasoline Engine Share by Configuration F (percentage share) 100% Less Diesel Electric Fuell Cell PHEV 6% 7% 0% 2024F 75% 50% 25% Niche for alternative power train Hybrid (Mild + Full) 16% 41% Gasoline 0% F 2021F 2023F 2024F I3 I4 I6/H6/V6 V8 Electric Other Diesel 30% Source: Autofacts 2018 Q2 Forecast Release 21

22 Alternative drivetrains will be the most important growth area in the foreseeable future 1 EU Powertrain: Alternative Engine Type Distribution 2017 vs 2024F (millions) 1,178 6,290 EU Powertrain: Hybrid Distribution** 2017 vs 2024F (millions) 3,582 4,927 1,254 2,743 0,669 0,861 0,254 0, Increase Increase Full Hybrid Mild Hybrid Increase Plug-In Hybrid Increase BEV/FCV* 2024F 2017 Increase Diesel Hybrid Increase Gasoline Hybrid 2024F Source: Autofacts 2018 Q2 Forecast Release *BEV = Battery Electric Vehicle, FCV = Fuel Cell Vehicle **excl. BEV/FCV 22

23 Powertrain will suffer a major disruption 1 Combustion Number of pieces powertrain Electric ~ pieces ~ 320 pieces Tank Air- and Fuel -Management Gearshift Transmission Battery Electronics Motor Transmission 7 employees 1 employee Number of employees in production 23

24 Driver The road to autonomous driving 2 In production In development No automation Driver assistance Partial automation Conditional Automation Highly Automation Full automation Driver tasks System tasks Driving task Monitoring Longitudinal and transverse guidance n/a Longitudinal or transverse guidance off Remaining drive task Monitoring n/a n/a Longitudinal and transverse guidance Longitudinal and transverse guidance Driver Driver and system System Driver Longitudinal and transverse guidance System Automation Reaction time Approx. 1 sec A few seconds A few minutes Never Other activities No other activity A few All including sleeping Fallback level Driver System Cases N/A Specific situations All situations Source: Strategy&, Verband der Automobilindustrie e.v. (2015, S.14), SAE International (2014a, S.2) und Ebner (2013, S.7), Bachelor thesis Julia Buettler (2016) 24

25 12 seconds At 150 km/h you were travelling half a kilometer during these 12 seconds

26 Audi, Tesla and Mercedes are the current frontrunners in autonomous driving 2 Comparison of driver assistance systems ADAS-Level ADAS functionalities Enabling technologies Level 0 Level 1 Level 2 Level 3 Level 4 Level 5 Audi A8 Mercedes S Class Tesla Model S Adaptive High Beams Predictive Automated Re-Routing Traffic Sign Recognition Driver Monitoring Predictive Suspension Damping V2X Communication Pre-Collision Braking / Forward Collision Braking Cross-Traffic Alert 1 Predective and adaptive Cruise Control Assistive Parking - driver assisted Lane Keeping Assist Blind Spot Monitoring Assistive Parking - Remote Parking / Key Parking Automated Lane Change / Lane Changing Assist Traffic Jam Assistant Emergency assistant Hands-off traffic jam assist Highway Autopilot (Single-Lane) * Intersection Movement Assist Fully Autonomous Valet Parking / Driverless Parking * Urban Autopilot / Fully Autonomous Urban Driiving Full Autonomy A8 level 3 certification in 2018/2019 * Not allowed in Germany 26

27 Mercedes, TESLA and Audi leading in series 2 driving assistance systems Short-term Mid-term Full autonomous vehicles disruptive change Security Well-being New Services Semi autonomous Driving Home- Integration Entertainment Vehiclemanagement Mobility- Management 2) Digital ecosystem for the vehicle Pay per use models Adapted infrastructure Intelligent Vehicles Autonomous Driving OEM Operating Model Shift 1) Vehicle-related services OEMs control vehicle-related Services Digital ecosystem players compete with OEMs for additional services Digital ecosystem player control a growing share of the user experience 27

28 The segemt heatmap shows clear winners and loosers in the upcoming transformation Powertrain Chassis Electric Body Exterior Interior Connected 1 Combustion Engine 1 Damper Stabilizer 1 Electrical System 1 Glazing & Cover 1 Door systems 1 Cockpit 1 Content Provider 2 Fuel System 2 Suspension 2 Power Supply 2 Vehicle Structure 2 Sealing 2 Seats 2 Frontend Provider 3 Intake System 3 Frame, Engine Suspension 3 Infotainment 3 Fastening & Adhesive 3 Exterior lighting 3 Cladding 3 Cloud solutions 4 Exhaust System 4 Steering 4 Switch & AC Control Total Total Total 4 Backend Provider 5 Cooling 5 Wheel, Tire, Accessories 5 Driving Assistance System 5 Cyber security 6 Transmission 6 Brake 6 Chassis Electronics 6 Artificial Intelligence Engine Management Energy Storage Power Electronics Total Body Electronics Interior Security System 7 Infrastructure (Mobile Network Operator) Total 10 Electric Motor & Generator 10 AC System Total Total Impact on value contribution: Negative Positive 28

29 Powertrain most negatively affected connected and autonomous with huge growth potential Powertrain Electric Connected OEMs will compensate overcapacity by insourcing All related segments affected similarly (Exhaust, Intake, Fuel) Combustion Engine Fuel System Intake System Exhaust System Cooling Electrical System Power Supply Infotainment Switch & AC Control Driving Assistance System Content Provider Frontend Provider Cloud solutions Backend Provider Cyber security Increase in totel value creation from currently 30% to 50% of vehicle Electric systems will migrate to high-voltage and bus systems Even in Powertrain huge growth potential for electric applications Transmission Engine Management Energy Storage Power Electronics Electric Motor & Generator Chassis Electronics Body Electronics Interior Security System AC System 6 7 Artificial Intelligence Infrastructure (Mobile Network Operator) Total Connected services are the entrance gate for non-automotive players Total Total 29

30 This is where the money goes Implementation of E-Call until mid 2018 as a key factor Development Total Market 1 Connected Car Market potential in billion (2016 vs. 2021) Growing demand for infotainment services in cars Home Integration Mobility Management Transformation from non-connected cars to connected cars. (new and after-sales market) Growing investments in connected cars services Increasing awareness for safety services Wellbeing Home Integration Vehicle 0.0 Mgmt Security Mobility Mgmt 40,3 6.0 Security Vehicle Management ,6 7.6 Wellbeing 13.4 Entertainment 9.5 Entertainment Availability of wireless high speed networks, as well as cloud-based services and API s Autonomous Driving A pioneer, able to create movement within the whole market or whole system. (Tesla for e-mobility) 39.6 Autonomous Driving Source: Strategy& 1) Cars without light commercial vehicles 30

31 Consequences?

32 The reorganization of the sector will have drastic consequences beyond the supply chain Focus 32

33 OEMs leading the way in the deals market almost exclusively doing tech and content deals *Stand September 2017: Akquisitionen, Mehrheits- und Kapitalbeteiligungen Minderheit oder VC Mehrheit oder Akquisition 33

34 Where does that leave the traditional automotive supply chain? Europe: Autonomous levels (in %) 100% 90% Europe: Powertrain distribution (in %) 100% 90% 80% 70% 60% 50% 40% Early and high investments Delayed earnings potential 80% 70% 60% 50% 40% Bad investment cases Crisis and Restruc turing 30% 30% 20% Over 20% capacity 10% and Price 10% 0% Pressure 0% Verbrenner Combustion Hybrid Electric Autonomous level 34

35 For all stakeholders the automotive deals landscape will become more difficult New techplayers entering Business model change of existing players Adaption speed/delayed profits New Technology Debt providers Automotive Deals Knowing the risk Legacy Technology Which business models will survive? Consolidation of Managing risk profiles Assessment and default! of supply segments new business Valuation: models Content Equity vs. investors Picking the winners Assets Finding and picking the right technology despite staggering multiples! How to make money in run-off scenarios and consolidation? Restructuring / downsizing needs Tier1 Corporate Portfolio Reorganisation Life span of existing business models No way out segment OEMs Securing the supply chain Securing the parts supply at current price levels! How to avoid and fight opportunistic investors? 35

36 Thank you for your attention! Thomas Steinberger Partner, PwC Germany Head of Automotive Transactions/ Restructuring Tel