mark seng – trends impacting the global automotive aftermarket
TRANSCRIPT
Trends Impacting the Global Automotive Aftermarket
Mark SengGlobal Aftermarket Practice LeaderJune 17, 2015
© 2015, IHS Inc.
Agenda
• Where Do Our Insights Come From
• Key Industry Driver
• The Trends
© 2015, IHS Inc.
• IHS acquired in July 2013
• IHS Automotive – Southfield, MI
• IHS – Denver, CO – started in 1959 as a provider of product catalog databases
IHS Automotive
Automotive market intelligence and solutions
Vehicle history reports for U.S. consumers and dealers
© 2015, IHS Inc.
AEROSPACE & DEFENSE
100+ years’ experience delivering unrivaled news, insight and intelligence on defense and security equipment, markets, industries and risk
CHEMICALOver 200 leading industry authorities creating integrated views and analysis across more than 300 chemical markets and 2,000 processes for 95 industries
FINANCE
Research on 200+ countries and territorieswith harmonized indicatorsfrom IHS analysts andeconomists
TECHNOLOGY
World’s largest electronics componentdatabase with more than 350 million parts
AUTOMOTIVE
The world’s largest teamof automotive analysts with hundreds of experts located in 15 key markets around the world covering the entire automotive value chain
ENERGY
Extensive Oil & Gas well information on 5.5+ million wells worldwide dating back as far as 1860
MARITIME
World’s largest maritime database with an information gathering heritage of 250+ years with comprehensive information on all vessels 100 GT and over
IHS Verticals
© 2015, IHS Inc.
Global Footprint
• 180+ Automotive analysts in 27 offices = global capability w/local expertise• VIO & Forecasts covering nearly every country in the world• Cover 97% of global vehicle demand, 99% of production & 97% of VIO
IHS Automotive office
LV sales key countries
LV sales countries with TIV
LV sales rest of world coverage
Key Driver: Vehicles Miles Traveled (VMT)
© 2015, IHS Inc.
First positive trend after 6 years of sustained flat miles driven.
First time > 3 trillion miles since 2007 peak.
Change in Driving Volume
Source: IHS Automotive, DOT and FHWA
© 2015, IHS Inc.
Change in Driving Volumes – Yr-o-Yr
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
• 2012 Up 0.3%• 2013 Up 0.6%• 2014 Up 1.7%
Source: IHS Automotive, DOT and FHWA
The Trends
Light vehicle sales continue their strong recovery – here and around the world.
The auto industry is back!
© 2015, IHS Inc.
U.S. light vehicle saleshit 16.5 million units in 2014…
…first time > 16M since 2007.
Source: IHS Automotive
U.S. Light Vehicle Sales
© 2015, IHS Inc.
U.S. light vehicle saleswill hit 16.9 million units in 2015…
…could break 17 million for first time in 10 years.
Source: IHS Automotive
U.S. Light Vehicle Sales
© 2015, IHS Inc.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
MILLIONS 11.3%
10.2%
13.2%
‐22%
7.5%5.4%
History Forecast
‐17.5%
U.S. Light Vehicle Sales
Source: IHS Automotive
2014 = 16.5 million units
© 2014 IHS
$430 Billion Annual Contribution to26 Governments
Growth Rate: Global 4.1% CAGR
Employment9M Direct, 50M Adjacent
Global Manufacturing5% of Total
Research & Development$85 Billion: Annual Spend $5Trillion
AUTOS
Assembled Vehicles80M growing to 100M units
Annual Output
Global Auto Industry
© 2014 IHS
Global Auto Industry
Investment: $11.5 Billion for23 New Vehicle Assembly Plants
Materials Demand:+43% Increase
100MillionAUTOS
2020 Annual Production
Investment: $4.2 Billion for70 New Auto Parts Plants
© 2015, IHS Inc.
Global light vehicle sales were over 86 million units in 2014…
…and will break100 million units by 2020.
Source: IHS Automotive
Global Light Vehicle Sales
© 2015, IHS Inc.
0
5
10
15
20
25
30
35
40
45
50
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Mature Markets China Others
Global Light Vehicle Sales
Source: IHS Automotive
© 2015, IHS Inc.
Global Light Vehicle Sales Forecast
2015:16.9 million
5.13.4
2.2 2.9 1.6 3.1
24.8
0
5
10
15
20
25
30
35United
States
Japan
Germany
France
Brazil
Russia
India
China
Annual Light Vehicle Sales Volume (in millions, 2006 – 2022)
Source: IHS Automotive Light Vehicle Sales Forecast
Top 8 markets account for close to 70% of global sales
China Remains Dominant; Little Sales Growth Expected for Developed Markets
© 2015, IHS Inc.
Billion vehicles by 2021
Billion vehicles by 2040
Global VIO
growing
over next6 years
27%
Global Light Vehicles-in-Operation
© 2015, IHS Inc.
0
50
100
150
200
250
300United
States
China
Japan
Germany
France
India
Brazil
Russia
Source: CY 2002‐2015‐2020, IHS Automotive
2015
• China and India to see fleets nearly double over forecast horizon – oil import cost exposure improving dramatically.
• Policies to promote more fuel efficient vehicles facing more difficult economics.
World Total2013 1.02 Billion2021 1.35 Billion
Global Light Vehicle VIO
© 2015, IHS Inc.
0
50
100
150
200
250
300
MILLIONS
VIO will Increase 9.2% by 2020
History Forecast
Aftermarket
Source: IHS Automotive
U.S. Light Vehicles in Operation
Data as of January1 each year.
Aftermarket must prepare for the vehicles entering service bays for years to come.
As VIO & new sales grow, the U.S. vehicle mix continues to evolve.
© 2015, IHS Inc.
COMPACT CUV
TRADITIONAL MID SIZE
TRADITIONAL COMPACT
FULL SIZE PICKUPS
Represent over 58% of all new U.S. registrations in 2014
4 non-Luxury Segments Dominate
15.7%
15.1%
15.1%
12.2%6.8%
Mid‐Size CUV
Source: IHS Automotive
© 2015, IHS Inc.
0
1
2
3
4
5
6
7
8
Car
CUV
Pickup
SUV
MPV
Sports Car
Van
Shift in Favor of CUV Design Continues in the Near Term
MILLIONS
US Light Vehicle Sales
Source: IHS Automotive
© 2015, IHS Inc.
0
1
2
3
4
5
6
7
Mid-Size
Full-Size
Compact
Subcompact
Mini
Micro
Compact & Midsize Maintain Dominance
US Passenger Car SalesMILLIONS
Source: IHS Automotive
© 2015, IHS Inc.
A-Segment
B-Segment
C-Segment
D-Segment
Full-Size Full-Frame
E-Segment
Small/Mid-Size Full-Frame
A B C D E CompactFull
Full-SizeFull
Global Production by Segment
A B C D E CompactFull
Full-SizeFull
NAFTA Production by Segment
2000 – 2020Smallest 3 Segments Grow
Share by 64%
2000 – 2020Smallest 3 Segments Grow Share by 27%
Source: IHS Automotive
Shift to Smaller Vehicles
© 2015, IHS Inc.
Smaller Size - More Power
4 Cylinder Engines
Source: IHS Automotive
© 2015, IHS Inc.
4 Cylinder Engines Gaining in Popularity
2012: 50% Market Share2013: 53% Market Share
2008: 41% Market Share
2014: 55% Market Share
4 Cylinder Engines
Source: IHS Automotive
© 2015, IHS Inc.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015
DOMESTIC CAR DOMESTIC LIGHT TRUCK IMPORT CAR IMPORT LIGHT TRUCK
27.5%
39.3%
23.0%
10.2%
19.6%
37.4%
27.3%
15.7%
-7.9
-1.9
4.3
5.5
% o
f Tot
al U
.S. V
ehic
les-
in-O
pera
tion
Change in Mix – Domestics vs Imports
Source: IHS Automotive
© 2015, IHS Inc.
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
DOMESTIC CAR IMPORT CAR
-26%
+23%
Cars - Continued Import Strength
© 2015, IHS Inc. Source: IHS Automotive
Light Trucks - Imports Gaining Share
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015DOMESTIC LIGHT TRUCK IMPORT LIGHT TRUCK
-1.5%
+59%
© 2015, IHS Inc. Source: IHS Automotive
VIO Import Growth Forecast
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
Domestic Import
-15%
89%
As vehicles age around the world,Aftermarket repair opportunities are beginning to evolve.
© 2014 IHS
Global Passenger Car Average Age 2010-2020
+53%+14%
+5%
-14%
+9.5%+9.3%
Source: IHS Automotive
Note: US is calculated to 2019
© 2014 IHS
Average Age - Europe
0
2
4
6
8
10
12
Belgium France Germany Italy Netherlands Spain UnitedKingdom
2000
2005
2010
2014
2020
Passenger Cars
Year
s
Source: IHS Automotive
© 2014 IHS
Average Age - BRIC
Passenger Cars
Year
s
0
2
4
6
8
10
12
14
Brazil Russia India China
2010
2014
2020
Source: IHS Automotive
© 2015, IHS Inc.
9.6 9.7 9.7 9.8 9.8 9.9 10.010.3
10.6
10.911.1
11.3 11.4 11.5
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Year
s
Cars & Light Trucks Combined
Average Age History – U.S.
Source: IHS Automotive
© 2015, IHS Inc.
%drop in new vehicle registrations
The market feltthe impact of the
Impact of New Vehicle Drop Off
Source: IHS Automotive
© 2015, IHS Inc.
2007
2002
3%
2014
15%
2007
2019
2014
3%
Rapid acceleration of average light
vehicle age in the U.S. is slowing
down.
Average Vehicle Age Slows Down
Source: IHS Automotive
© 2015, IHS Inc.
11.42014 11.6
2016
Average Age – Slowing Down
11.82019
11.52015
Source: IHS Automotive
© 2015, IHS Inc.
Vehiclesnew to 5 years
old grow
32%
Vehicles6‐11 years old
decline
Impact on VIO Age Groups - by 2019
‐21%
Vehicles12 + years old
grow
15%Is the aftermarket “sweet spot” really shrinking – or just changing?
Source: IHS Automotive
Increasing vehicle complexityBrings both challenges and opportunity
© 2015, IHS Inc.
To reach this goal, every OEM must improve fuel
efficiency by 5% per year!
To reach this goal, every OEM must improve fuel
efficiency by 5% per year!
OEM New Technology Driving Vehicle Complexity
© 2015, IHS Inc.
Share of Global New Sales - 2021
Source: IHS Automotive
© 2015, IHS Inc. Source: IHS Automotive
2014 Top 10 Markets for Hybrid Registrations - > 30% of Total
© 2015, IHS Inc.
• Gasoline direct‐injection
• Turbo chargers
• Stop/start capability
• Cylinder de‐activation
• AWD disconnect
• More efficient transmissions
– More speeds and CVTs
The Traditional Internal Combustion Engine – w/New Technology
Source: IHS Automotive
© 2015, IHS Inc.
Powertrain Technology by Region
-
2
4
6
8
10
12
14
Prod
uctio
n in
Mill
ions
EuropeGCJKNAFTASASasia
Mech. Tech TransmissionElec. Tech
OEM Powertrain Investment - 2013
Source: IHS Automotive
© 2015, IHS Inc.
- 2 4 6 8
10 12 14 16 18 20
Prod
uctio
n in
Mill
ions
EuropeGCJKNAFTASASasia
Mech. Tech TransmissionElec. Tech
Powertrain Technology by Region
OEM Powertrain Investment - 2021
Source: IHS Automotive
© 2015, IHS Inc.
16%Today
26%Today
2 Technologies Emerge
Source: IHS Automotive
© 2015, IHS Inc.
Ultrasonic Parking SensorsCamera Parking Sensors
Radar Collision/ACC Sensors
Stereoscopic Multi-purpose Forward Camera Sensors
Additional Sensors, ECUs
Infrared Night Vision Sensors
Electronics & Sensors Increasing
© 2015, IHS Inc.
Electronics & Sensors Increasing
© 2015, IHS Inc.
Complexity = Opportunity
© 2015, IHS Inc.
The Aftermarket has the needed parts & trained technicians to service this new technology just
as efficiently & more cost‐effectively than other channels.
The Aftermarket has the needed parts & trained technicians to service this new technology just
as efficiently & more cost‐effectively than other channels.
Complexity = Opportunity
1. The auto industry is back! Global light vehicle sales continue strong recovery2. As new sales & VIO continue to grow, the vehicle mix is changing rapidly3. As vehicles age, the aftermarket repair opportunities are evolving4. Increasing vehicle complexity brings both challenges & opportunity
Thank You
Mark SengGlobal Aftermarket Practice [email protected]