The Global Automotive Industry Challenges and Opportunities 21st International Recycled Aluminium Conference Dubai - UAE 5 th November, 2013 Ahmed M.Sorour Chief Executive Officer Qatar Automotive Gateway
GCC and MENA Supply Chain Position and Reach has a potential to Grow in the Medium & Long Term Along with Asia s World Motor Vehicle Production 2007 2014, million units 73.1 70.7 61.7 World 77.8 80 84.1 89.4 E 16.6 Western Europe 12.2 13.8 14.1 12.8 15.2 E 8.8 China 13.7 18.2 18.4 19.2 22 E 07 08 09 10 11 12 14 North America 15.4 15.7 16.5 E 12.1 13.4 8.7 Japan 11.5 7.9 9.6 8.3 9.9 11 E South America India Korea 3.6 3.7 4.1 4.3 4.2 5 E 2.3 2.6 3.5 3.9 4.1 5.1 E 4 3.5 4.2 4.6 4.5 5 E Source: OICA A New Driving Force in The Automotive Industry CONFIDENTIAL 2
Global Car Sales: Strong Recovery since the 2008 Crisis. Continued Growth Expected After 2013 Global Sales Of Passenger Vehicles (million vehicles) Forecast 100m units by 2017 69.5 66.0 63.8-5.0% 34.4 30.3-3.3% +13.5% 72.5 75.6 +4.4% 36.5 37.7 33.5 79.5 81.9 +5.2% +3.0% 39.2 40.5 +6.0% 86.9 42.8 +5.9% 92.0 96.2 +4.6% 45.3 47.3 35.2 35.7 30.4 36 37.9 40.3 41.5 44.1 46.7 48.9 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1) Incl. Light Commercial Vehicles Source: HIS; Roland Berger Jan - Jun July - Dec A New Driving Force in The Automotive Industry CONFIDENTIAL 3
Long Term Production Shift from TRIAD to BRIC+S+M+++... 2008 2014 2018 Triad ROW BRICK 60% 12% 28% 47% 40% 16% 17% 37% 43% 68M 87M 115M Triad: North America, WE Big 5, Japan/Korea Source: LMC Automotive May 2012 A New Driving Force in The Automotive Industry CONFIDENTIAL 4
The Automotive Industry is under significant pressure to reduce CO2 emissions The U.S. raised the Corporate Average Fuel Economy Standards (CAFE) for cars from 11.7 km/litre to 15.1 km/litre by 2016, and to 26.4 km/litre in 2025 11.7 km/litre 15.1 km/litre +30% 26.4 km/litre 2025 2010 2016 +225% By 2020 CO2 Emissions targets per km for EU 95g (3.9L / 100 km), China 117g, Japan 105g and by 2025 US 107g Many OEMs view light-weighting as one of the key options for meeting the stricter targets as ~1 kilogram of Aluminium can replace 2 kilograms of steel with the same safety and strength For example in the US, the average vehicle aluminium content is expected to increase from 105 kg to 170 kg by 2020 Sources: PRTM Research, OICA (International Organization of Motor Vehicle Manufacturers) A New Driving Force in The Automotive Industry CONFIDENTIAL 5
Key Challenges that the OEM s and Suppliers are facing Reduction in Manufacturing Cost Reduce Co2 Emissions Global Warming Rising Fuel Prices Reduce TCO Automotive OEM s and Suppliers Imroving Fuel Economy Government Regulations & Subsidy Sales Growth in Low Price Markets Safety Inside & Outside Environment & Safety A New Driving Force in The Automotive Industry CONFIDENTIAL 6
Lightweight materials represent a relatively fast and easier means for reducing automotive carbon emissions The Three Levers of Vehicle Emission Reduction Carbon Emission = Liter km mass C Liter km traveled Vehicle 1 2 3 Fuel Consumption Fuel Carbon Content Vehicle Activity Key Levers of Fuel Consumption Improvement Source: PwC Analysis Coventional Powertrain Technology Engine Down Sizing by FIS Transmission Start Stop Technology Advanced Powertrain Technology HEV Ethanol Clean Diesel PHEV/BEV Fuel Cells Conventional Vehicle Technologies Aerodynamics Tire Technology KERS Lightweight Materials Aluminium CFRP & Composites... Much opportunity remains but not enough to meet future emissions regulations Will be essential to meeting future emissions targets but costs remain high The low hanging fruit to meeting future emissions targets A New Driving Force in The Automotive Industry CONFIDENTIAL 7
The Impact of Weight Reduction in Cars Reduction of emissions Impact of the Car Weight on Co2 Emissions Weight reduction of 100Kg effect: Co2 emission 8.8 up to -12.5 gm of Co2 per Km 1Kg saving could reduce 20Kg Co2 vehicle emission in its life time Reducing cost of ownership Impact of the Car Weight on Fuel consumption Weight reduction of 100Kg effect: Fuel consumption 0.35 up to -0.5 Lt per 100km Increasing Performance Impact of the Car Weight on driving performance + Longitudinal/ transversal dynamics + Axle load distribution + Payload efficiency A New Driving Force in The Automotive Industry CONFIDENTIAL 8
Example of Qatar Competitive Cost Advantage For the Production of Aluminium Die Cast Engine Blocks Cost Structure of a 32kg 3.0l Engine Block for European OEM In USD Qatar vs. Western Europe Qatar vs. Eastern Europe Qatar vs. India Duties and Transport Energy Labor & Admin Material 112.5 7.5 2.0 39.0 64.0 Cost of Manufacturing Western Europe 105.0 2.0-7.0 +8.0 33.0 6.0-9.0-4.0 64.0 Cost of Manufacturing Eastern Europe 96.0 20.0 62.0 8.0 6.0-10.0-4.0 +4.0-12.0-5.5-3.0 +8.0 0.0 Estimates -21% 93.0-13% 93.0-3% 93.0 Cost of Manufacturing in India Material Cost Labor Cost Energy Cost Duties and Transport Costs of Manufacturing in Qatar Source: qatar Ag Research A New Driving Force in The Automotive Industry CONFIDENTIAL 9
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