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New Technologies Changing Automotive Markets in Western Europe
AUTOMOTIVE
Martin Benecke, Manager West Europe LV Sales Forecasting, +4920118579157, [email protected]
26 January 2017 | Frankfurt, Germany
© 2017 IHS Markit
Agenda
• Macroeconomic environment
• West European car market outlook
2
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
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2000 2002 2004 2006 2008 2010 2012 2014 2016
Pe
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Consumers Industrial sector Services sector
Eurozone sentiment indexes have improved
3
Positive replies minus negative replies
Source: European Commission © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
• Eurozone growth has picked up in the fourth quarter, reflecting strength in retail sales, new orders, and business and consumer sentiment.
• Political risks are elevated, however, with elections due in 2017 in Germany, France, the Netherlands, and possibly Italy.
• Aggressive monetary stimulus, a weaker euro, and reduced fiscal headwinds will help sustain growth.
• With inflation picking up only gradually, the European Central Bank (ECB) is not expected to raise interest rates until late 2018.
• The euro is projected to fall to slightly below parity with the US dollar by the end of 2017 before gradually recovering.
• Ireland, Spain, and Sweden will maintain relatively healthy economic growth, but the United Kingdom, Italy, and France will struggle.
4
Western Europe stays on a slow growth path
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
0,0
0,5
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3,0
3,5
Germany United Kingdom France Italy SpainAn
nu
al
perc
en
t c
ha
ng
e
2015 2016 2017 2018 2019–23
Real GDP growth in Western Europe
5
Real GDP
Source: IHS Markit © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
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Netherlands Switzerland Sweden Belgium Norway AustriaAn
nu
al
perc
en
t ch
an
ge
2015 2016 2017 2018 2019–23
Real GDP growth in Western Europe
6
Real GDP
Source: IHS Markit © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
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0
1
2
3
4
Germany UnitedKingdom
France Italy Spain Netherlands
An
nu
al
perc
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t ch
an
ge
2015 2016 2017 2018 2019–23
Consumer price inflation will rise in Western Europe
7
Consumer price index
Source: IHS Markit © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit 8
0 5 10 15 20 25 30
SwitzerlandSwedenNorway
DenmarkPortugalSloveniaSlovakia
IrelandGreeceFinland
BelgiumAustria
NetherlandsSpain
UKItaly
FranceGermany
EU (28)Eurozone
US
Source: IHS Markit © 2017 IHS Markit
Unemployment rates Most markets see positive employment trends
Unemployment rates
2017 New Year’s Briefing | 26 January 2017
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5
10
15
20
25
30
Italy France Spain United Kingdom Eurozone GermanySource: IHS Markit © 2017 IHS Markit
Unemployment rates
December 2016
Unem
plo
ym
ent ra
te
2010
-16
Unemployment rates Most markets see positive employment trends
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit Last point is Nov 16
12,00
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14,00
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16,00
17,00
18,00
Millio
n
WE WE trend
Trend wise, WE sales are coming close to the levels we saw in the high phase 2009
© 2017 IHS Markit
Western Europe Passenger Car Sales –SAAR Much, much better but still a long way to go
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
Western Europe Passenger car market 2016
13.2 Million
244K 145K 112K 97K 58K 115K
14.0 Million
0
2
4
6
8
10
12
14
16
2015 Italy Germany Spain France UnitedKingdom
Rest 2016
Sa
les
in
Mil
lio
ns
Source: IHS Markit © 2017 IHS Markit
Recovery in big parts of Western Europe
+5.8%
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
Western Europe Passenger car market 2016
32,1%
25,0%
17,3% 16,8% 15,5% 10,9% 10,4% 10,1% 9,7% 9,5% 9,0% 7,6% 7,0% 6,8% 5,1% 4,5%
2,6% 2,2%
-2,5%
-15,0% -20%
-10%
0%
10%
20%
30%
40%
Source: IHS Markit © 2017 IHS Markit
Recovery in big parts of Western Europe
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
Western Europe Passenger car market Share of alternative propulsion vehicles (BEV, PHEV) from 2012-2016
0,0%
0,5%
1,0%
1,5%
2,0%
France UnitedKingdom
Germany Spain Italy WEU average
2012
2013
2014
2015
2016
Source: IHS Markit © 2017 IHS Markit
New products + incentives support share, but still low level
2017 New Year’s Briefing | 26 January 2017
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West European car market outlook Germany 1 million BEV+PHEV by 2020 target, realistic?
0,6% 1,5% 3,2% 7,2% 16,0%
0,0
0,3
0,5
0,8
1,0
0%
20%
40%
60%
80%
100%
2016 2017 2018 2019 2020
Share BEV+PHEV Share Non BEV+PHEV Car Parc BEV+PHEV
Source: IHS Markit © 2017 IHS Markit
OEM targets ambitious – infrastructure + price +product crucial
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
Western Europe Passenger car market 2017
14.0 Million
123K 45K 39K 38K -137K 18K
14.1 Million
0
2
4
6
8
10
12
14
16
2016 Italy France Germany Spain UnitedKingdom
Rest 2017
Sale
s in
Millio
ns
Source: IHS Markit © 2017 IHS Markit
Recovery is slowing down in big parts of Western Europe
+0.9%
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
Western Europe Passenger car market outlook 2017
14,3%
9,9% 9,7% 9,2%
6,8%
3,3% 2,3%
1,5% 1,2% 1,2% 1,1% 0,5% 0,3%
-1,4% -1,8% -1,9% -2,0% -2,2%
-5,1% -5,2%
-10%
-5%
0%
5%
10%
15%
20%
Source: IHS Markit © 2017 IHS Markit
Recovery is slowing down in big parts of Western Europe
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
West European car market outlook Germany
2,3% 3,7%
-9,1%
-1,9%
23,2%
-23,5%
8,3%
-2,4% -4,2%
2,9% 5,6% 4,5% 1,2%
-0,8% -2,7% -2,4% -0,6%
-30%
-20%
-10%
0%
10%
20%
30%
2,6
2,8
3
3,2
3,4
3,6
3,8
4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
TIV (%-change Y/Y, rhs) TIV (units)
Car sales will level off in a corridor of 3.1 - 3.25 m units
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
West European car market outlook Germany - new car regs by sales channel in % 2014-16
36,2% 34,2% 35,0%
40,2% 41,3% 40,3%
23,6% 24,5% 24,7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2014 2015 2016
Private Tactical Business
Private demand still weak – Growth coming from Business + Tactical
Source DATAFORCE
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
West European car market outlook United Kingdom
-5,0% -3,9%
2,2%
-11,1%
-6,5%
1,8%
-4,4%
5,4%
10,8% 9,4%
6,4%
2,2%
-5,1%
-3,1%
-1,2% -2,4%
-1,3%
-15%
-10%
-5%
0%
5%
10%
15%
0
0,5
1
1,5
2
2,5
3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
TIV (%-change Y/Y, rhs) TIV (units)
Five year of annual growth coming to an end
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
West European car market outlook France
2,7%
-3,2%
3,2%
-0,7%
12,3%
-2,2% -2,1%
-13,9%
-5,7%
0,3%
6,8% 5,1% 2,3% 1,5%
0,9%
-2,4%
0,2%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
0
0,5
1
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
TIV (%-change Y/Y, rhs) TIV (units)
Slight recovery - Car sales will level off at around 2.0 m units
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
West European car market outlook Italy
-1,4%
3,8% 6,7%
-13,6%
1,1%
-9,7% -10,4%
-20,7%
-7,1%
4,5%
15,6% 15,5%
6,8%
-0,2%
0,8% 0,8%
-0,8%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
0,5
1
1,5
2
2,5
3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
TIV (%-change Y/Y, rhs) TIV (units)
Strong recovery with double-digit growth
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
West European car market outlook Spain
2,3%
-0,7% -1,5%
-28,0%
-17,5%
3,1%
-17,9% -13,6%
3,3%
18,3% 20,9%
10,9% 3,3% 2,1% 4,9% 4,0%
1,5%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
0
0,2
0,4
0,6
0,8
1
1,2
1,4
1,6
1,8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
TIV (%-change Y/Y, rhs) TIV (units)
3 years of double-digit growth
2017 New Year’s Briefing | 26 January 2017
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C
AG
R 2
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6 -
202
3
Southern European countries with room to recover, rest is saturated
West European car market outlook 2016-2023 by Top10 countries
-3%
-2%
-1%
0%
1%
2%
3%
-350 -250 -150 -50 50 150 250 350
Volume changes in 1000 units
Source: IHS Markit © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
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C
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6 -
202
3
Small and Compact segment growing due to SUV expansion
West European market outlook 2016-2023 segment development
-4%
-2%
0%
2%
4%
6%
-240 -140 -40 60 160
in 1000 units
Source: IHS Markit © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
C
AG
R 2
01
6 -
202
3
SUV still the place to be – tough times for MPV
West European car market outlook 2016-2023 bodytype development
Hatchback LCV
MPV
Sports
SUV
Wagon
Sedan
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
-1.000 -500 0 500 1.000 1.500
Source: IHS Markit © 2017 IHS Markit
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
C
AG
R 2
01
6 -
20
23
Source: IHS Markit © 2017 IHS Markit
FCA strong product activity should recapture some market share
West European car market outlook 2016-2023 by Top12 OEM
-3%
-2%
-1%
0%
1%
2%
3%
-300 -200 -100 0 100 200 300
Volume changes in 1000 units
2017 New Year’s Briefing | 26 January 2017
© 2017 IHS Markit
Key takeaway box
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• Europe remains in recovery mode, helped by release of pent up demand from post crisis years (not immune to risks).
• Fears that longer term demand could struggle to reach previous levels in Europe due to blend of fast-evolving transportation trends, emerging consumer behavior and changing demographics (esp. certain markets).
• OEMs helping to maintain/grow sales with promotional activity: heavily price discounting, special offers. Financial packages: highly flexible, full service package for peace of mind, low monthly payments. Helps justify N/T upgrades.
• Down sizing trend will broadly continue related to fuel economy concerns and in order to minimize taxes (esp. CO2 related taxation).
• So far, EVs remain hard sell, with consumers unwilling to switch without significant incentives (government/OEM/local).
• SUV remain a clear “winning ticket”. OEMs investing heavily in Crossover/SUV portfolio and future variants
• Premiums will continue to explore further into mass market while enjoying less competition from mainstream in upper segments (it has never been so easy to drive a premium car).
2017 New Year’s Briefing | 26 January 2017
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