IHS AUTOMOTIVE Presentation Light Vehicle Forecasts Synopsis of the Automotive Industry with a focus on Latin America November, 2015 ihs.com Mexico City, Mexico Guido Vildozo Manager, Latin America +1 781 301 9037 guido.vildozo@ihs.com
November 2015 Contents Economic Outlook Global Automotive Industry Outlook Global Automotive Industry Outlook by OEM Latin American Automotive Industry Outlook Summary 2
Economic Indicators Guido Vildozo, Manager LatAm, +1 781 301 9037, guido.vildozo@ihs.com 3
GDP growth rate % Emerging market slowdown having global implications; commodity prices driven lower World economic growth rates November 2015 8 7 6 5 4 3 2 1 0-1 -2-3 -4-5 Source: IHS 2014 2015 2016 2017 avg. 2018-22 World United States World average 2015=2.5% Japan Eurozone Brazil Russia India China 4
Percent, 2012 15 Many markets showing weakening conditions; India/Eurozone improving November 2015 World industrial production 15 10 5 September 2015 0-5 -10 China India Japan Russia United States Source: IHS, three-month average, in percent, historical actuals and current estimate Brazil Eurozone 5
Percent, 2012 15 Most labor markets tightening; Russia/Brazil feeling impact of recession World unemployment rates November 2015 14 12 September 2015 10 8 6 4 2 0 China Japan Russia United States Source: IHS, monthly, in percent, historical actuals and current estimate Brazil Eurozone Germany 6
Percent, 2012 15 Low oil and commodity prices keeping inflation muted in mature markets World consumer prices 18 16 14 November 2015 12 10 September 2015 8 6 4 2 0-2 China India Japan Russia United States Source: IHS, monthly, in percent, historical actuals and current estimate Brazil Eurozone 7
Percent, end of quarter The US Federal Reserve will lead in raising policy interest rates December increase is expected November 2015 Policy interest rates 6 5 4 3 2 1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 United States Eurozone Japan United Kingdom Source: IHS 8
Percent, end of quarter Policy interest rates in key emerging markets respond to inflation and exchange-rate pressures Policy interest rates 18 November 2015 15 12 9 6 3 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 * One-year loan rate Source: IHS Brazil Russia India China* 9
Global Automotive Industry Outlook Guido Vildozo, Manager LatAm, +1 781 301 9037, guido.vildozo@ihs.com 10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Light vehicle sales SAAR, millions sold Global light vehicle selling rates Upward momentum changed about one year ago 100 90 80 World 70 World without China 60 50 40 Source: IHS Automotive analysis, monthly data with X12 seasonal adjustment 11
2007 2008 2009 2010 2011 2012 2013 2014 2015 Light vehicle sales SAAR, indexed 2007=1 Regional light vehicle selling rates Most emerging markets declining from recent peaks 3.2 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 2007 sales level Lehman collapse J/K China India ASEAN SA NA WE CE EE ASEAN C Europe E Europe Gr China India Japan Korea N America S America W Europe Source: IHS Automotive analysis, monthly data with X12 seasonal adjustment 12
Million units Global light vehicle sales outlook 2014 15 sales volume 88.7 + 0.5 + 0.1 + 0.0-0.4-0.7 88.2 + 1.0 87.7-1.1 87.2 + 1.1 86.7 86.7 86.2 86.3 +.01% 85.7 2014 West Europe North America Greater China South Asia Middle East/Africa Japan/Korea Central/East Europe South America 2015 13
Million units Global sales 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2012 2013 2014 September 2015 YTD 2015 2016 2017 Global Change For September 2015, global demand rose 2.0%, leading year-to-date demand to grow 0.9% to 64.02 million units. The near-term outlook for China is less gloomy than for our previous forecast a consequence of modest tax cuts for passenger car purchases introduced by the government as a short-term economic stimulus. Our global sales forecast for full-year 2015 is set at 86.74 million units, up by 0.5%, a mild upgrade compared with our previous forecast. This figure represents the lowest rate of growth in six years, with a mixed picture for global demand mature markets generally remaining in recovery or growth mode, while many emerging markets are struggling to maintain auto sales momentum. Until the end of the forecast horizon in 2021, global light vehicle sales are expected to grow at a compound annual growth rate of 2.6% to approach 103 million units. 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Year-on-year change 14
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Market is flat in 2015, but weakness in emerging markets only temporary, however, recovery will take a while World light vehicle sales 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Global sales remain at 86 million in 2015, but economic improvement will lift market 2% next year; long-term prospects unchanged 100 million in 2020. Market growth 2009-12 2012-15 2015-22 Mature 10% 12% 1% China 43% 26% 34% Emerging 39% -12% 48% Source: IHS Mature markets China Emerging markets 15
Russia Brazil Indonesia Thailand Japan Saudi Arabia World China Australia Canada Germany United States South Korea France United Kingdom India Italy Mexico Iran Turkey Spain Forecasted change in LV sales Top-20 light vehicle sales growth Emerging markets in decline, mature markets growing 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% -35% 2015 2016 Worst markets of 2015 will improve in 2016; however, many of the stronger markets likely slow next year. Source: Top-20 sales markets, IHS Automotive 2015 and 2016 light vehicle sales forecasts 16
Presentation Name / Month 2015 Global Automotive Industry Outlook by OEM Guido Vildozo, Manager LatAm, +1 781 301 9037, guido.vildozo@ihs.com 17
Share of OEM sales Greater China s share of OEMs global sales Dependence varies across automotive manufacturers 45% 40% 35% 30% 25% 20% 15% 10% 5% 2014 2022 Volkswagen and GM most dependent on China for sales while FCA is the least, but importance rising for all. 0% FCA Ford GM Honda Hy-Kia R/N Toyota VW Region Source: IHS Automotive 18
FCA Ford GM Honda Hy-Kia R/N Toyota VW Region FCA Ford GM Honda Hy-Kia R/N Toyota VW Region FCA Ford GM Honda Hy-Kia R/N Toyota VW Region FCA Ford GM Honda Hy-Kia R/N Toyota VW Region New World share of OEMs global sales Exposure to emerging markets varies greatly ASEAN 15% 13% 11% 9% 7% 5% 3% 1% -1% 2014 2022 India 8% 7% 6% 5% 4% 3% 2% 1% 0% South America 18% 16% 14% 12% 10% 8% 6% 4% 2% All emerging markets 60% 55% 50% 45% 40% 35% 30% 25% 20% 19
FCA Ford GM Honda Hy-Kia R/N Toyota VW Region FCA Ford GM Honda Hy-Kia R/N Toyota VW Region FCA Ford GM Honda Hy-Kia R/N Toyota VW Region FCA Ford GM Honda Hy-Kia R/N Toyota VW Region Old World share of OEMs global sales Many companies still heavily reliant on domestic sales North America Japan/Korea 60% 50% 40% 30% 20% 10% 0% 2014 2022 25% 20% 15% 10% 5% 0% West Europe 35% 30% 25% 20% 15% 10% 5% 0% All developed markets 75% 70% 65% 60% 55% 50% 45% 40% 35% 20
Millones Top 22 Automakers 2022 14 12 91% 2015 2022 12% 10% 10 8 6 4 CAGR 8% 6% 4% 2 2% 0 Volkswagen Toyota Ren/Nissan Hyundai GM Ford Honda FCA PSA Suzuki Daimler BMW GM-Wuling Changan Mazda Tata Geely BAIC Dongfeng Mitsubishi Great Wall Fuji Heavy 0% 21
Millones Opportunity Top 15 Gainers 3.0 2.5 2.0 1.5 1.0 0.5 70% 0.0 Daimler BMW Dongfeng Geely Ford PSA Suzuki FCA Tata GM Toyota Honda Hyundai Volkswagen Ren/Nissan 22
Million Units Supplier Dynamics Mega Platforms Drive Production Growth Automotive Industry Outlook / September 2015 120 55% 60.0% 100 47% 50% 50.0% 80 60 40 20 18% 18% 27% 39% 40% 38% 40.0% 30.0% 20.0% 10.0% % Share of Global Output 0 2006 2008 2010 2012 2014 2016 2018 2020 2022 1M+ Platform < 1M Platform Share 0.0%. ALL RIGHTS RESERVED. 23
Supplier Dynamics Top 10 Global Platforms 2022 Hyundai - PB/PB(2) Honda - CCA Ford - C1/C2 VW - MQB A0 Ren/Nissan - CMF-C/D GM - VSS-F B/C Toyota - NGA-C Hyundai - HD/AD Ren/Nissan - CMF-B VW - MQB A/B 0 2 4 6 North America Exposure Segment (Top Nameplate) Millions Automotive Industry Outlook / September 2015 B (Accent) Nine of the Top-10 C/D (Civic/Accord) global platforms have or will have exposure to C/D (Focus/Fusion) North America in 2022 B (Polo) C (Sentra) B/C (Sonic/Cruze) C (Corolla) C (Elantra) B (Versa) C (Golf) The march of global platforms into developing markets accounts for overall growth Volume expansion also driven by major OEM platform consolidation in B- through D-segments Platform consolidation alters competitive dynamic toward larger, more diversified players. ALL RIGHTS RESERVED. 24
Presentation Name / Month 2015 Latin America Automotive Industry Outlook Guido Vildozo, Manager LatAm, +1 781 301 9037, guido.vildozo@ihs.com 25
IHS has had a difficult time anticipating 2015 Continuous drop since the beginning of the year Presentation Name / Month 2015 4,0 IHS July 15 IHS June 15 IHS Mar 15 IHS Jan 15 3,0 3,3 3,3 3,05 3,08 2,68 2,70 2,54 2,43 3,4 3,15 2,78 2,48 3,6 3,25 2,91 2,58 3,7 3,37 3,08 2,74 2,0 2013 2014 2015 2016 2017 2018 2019 26
Presentation Name / Month 2015 Brazilian IHS Long Term Has R2 of.96; with current GDP/Wages, Driving Pop, Parc 2014 2015 2016 2017 Total 3,328,017 2,890,587 2,951,443 3,093,685 15.2 14.8.2.1.0 14.4 14.0 13.6 13.2 -.1 -.2 90 92 94 96 98 00 02 04 06 08 10 12 14 Residual Actual Fitted 27
Presentation Name / Month 2015 Brazilian IHS Short Term Has R2 of.99; with Payment/Wages, Unemployment, IPI 2014 2015 2016 2017 Total 3,328,017 2,450,665 2,100,042 2,220,108 4,000,000 3,500,000 3,000,000 160,000 120,000 80,000 40,000 0 2,500,000 2,000,000 1,500,000 1,000,000-40,000-80,000-120,000 03 04 05 06 07 08 09 10 11 12 13 14 Residual Actual Fitted 28
Mexico Light Vehicle Sales Margin of Error 2010 2011 2012 2013 2014 Actual 823,328 904,739 987,335 1,063,361 1,135,290 Dec '09 766,008 813,711 871,377 935,524 984,399 Dec '10 929,438 979,226 1,006,088 1,092,728 Dec '11 972,270 1,030,367 1,078,395 Dec '12 1,047,181 1,094,926 Dec '13 1,110,877 MOE 2010 2011 2012 2013 2014 Dec '09 7.5% 11.2% 13.3% 13.7% 13.2% Dec '10-2.7% 0.8% 5.7% 3.7% Dec '11 1.5% 3.2% 5.0% Dec '12 1.5% 3.6% Dec '13 2.1% 1 YR 2 YR 3 YR 4 YR Average MOE 3.1% 4.7% 8.0% 8.7% Solid track record anticipating future market developments! 29
Millones Mexico Light Vehicle Sales SAAR 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 Million Units 0.6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LV Sales (left scale) 30
Weakness/Volatility of FX: almost all across the region 170 165 160 155 150 145 140 135 130 125 120 115 110 105 100 95 90 Volatility all over the region 2014 2015 Brazil Mexico Argentina Peru Chile Colombia Uruguay 31
Latin America Light Vehicle Sales Outlook 2015 A difficult year to forecast! Vehicle Sales: Country CY 2014 CY 2015 P'15 CY 2016 P'16 CY 2020 Argentina Brazil Chile Colombia Ecuador Mexico Peru Venezuela 650,144 600,499 3,333,082 2,432,967 328,412 262,011 296,047 263,004 92,930 93,491 1,135,029 1,307,044 165,915 145,773 21,573 19,468-7.6% -27.0% -20.2% -11.2% 0.6% 15.2% -12.1% -9.8% 579,740 2,100,228 262,057 264,117 94,413 1,375,876 150,483 20,313-3.5% -13.7% 0.0% 0.4% 1.0% 5.3% 3.2% 4.3% CY 2015 Dec14 703,324 503,345 2,873,097 3,250,097 318,780 304,637 347,533 320,493 103,943 70,175 1,451,555 1,170,684 205,736 177,017 46,397 17,611 MOE '15 19.3% -25.1% -14.0% -17.9% 33.2% 11.6% -17.7% 10.5% 32
Latin America Light Vehicle Sales Outlook Sales by OEM Presentation Name / Month 2015 Vehicle Sales: Sales Parent CY 2014 CY 2015 P'15 CY 2016 P'16 CY 2020 General Motors -29.0% -11.8% 859,771 610,274 538,331 633,262 FCA -29.3% -8.2% 822,023 581,544 533,878 686,150 Volkswagen -29.4% -18.2% 736,558 520,348 425,458 564,838 Renault/Nissan -16.1% -2.1% 534,218 448,066 438,822 604,460 Hyundai -16.0% -7.0% 448,086 376,270 349,790 520,229 Ford -13.3% -8.5% 445,828 386,522 353,543 423,119 Toyota -10.3% -8.2% 346,469 310,641 285,309 423,578 PSA -29.7% -11.6% 213,344 150,087 132,738 186,095 Honda 6.1% 0.6% 156,251 165,840 166,827 196,423 33
Mexico Light Vehicle Sales SAAR (12MMA) vs. Consumer Confidence 1.4 Million Units Index 120 1.3 110 1.2 1.1 100 1.0 90 0.9 0.8 80 0.7 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 70 LV Sales (left scale) Consumer Confidence 34
Mexico Light Vehicle Sales Credit is key to the market 35% 25% 15% 5% Financial Reform has helped ease credit plus Detroit Three banks are back 2007 2008 2009 2010 2011 2012 2013 2014 2015 (AUG) Finance Take 64.6% 59.5% 53.6% 48.6% 51.3% 52.5% 56.3% 60.1% 62.9% Units 35% 25% 15% 5% -5% -15% -25% -35% 2007 2009 2011 2013 2015 (AUG) -5% -15% -25% -35% DELTA TIV -R DELTA CR -R 35
Millones Mexico Light Vehicle Sales Used Car Imports Government has slowed used car imports drastically 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 120% Units 100% 80% 60% 40% 20% 0% -20% -40% -60% -80% -100% 2005 2007 2009 2011 2013 2015 (AUG) Light Veh -L DELTA USED -R DELTA TIV -R 36
Millones Mexico Light Vehicle Sales More manufacturing bring us to new highs? Forecast calls for opening of used cars around 2018 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Light Veh -L Annual Change -R 35% 25% 15% 5% -5% -15% -25% -35% 37
Thank You, Muito Obrigado, Muchas Gracias! Guido Vildozo Manager, Latin America Vehicle Sales guido.vildozo@ihs.com Roberto Barros Senior Market Analyst, Latin America Light Vehicle Sales roberto.barros@ihs.com
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