Mexico Automotive Market: Investment

Transcription

1 Mexico Automotive Market: Investment Jeff Wegehaupt - Analyst, North American Forecasts 23 July 2014

2 Outline Mexico Economic Overview North American Demand Environment North American Production Dynamics Mexico Production Outlook by Manufacturer Summary 2

3 Economic Improvement Expected in 2014 for Mexico 6.0% 4.0% 2.0% 0.0% -2.0% % -6.0% Q1 GDP growth was a mere 1.8% (YoY), however the worst of the downturn seems to be over, and annual GPD growth is expected to be at 2.4% (YoY) While the economy is picking up, downside risks arise from any stalling in the US recovery, a possible drought due to the El Niño weather, and rising global oil prices Source: Oxford Economics, LMC Automotive 3

4 Outline Mexico Economic Overview North American Demand Environment North American Production Dynamics Mexico Production Outlook by Manufacturer Summary 4

5 Mexico Sales Current Snapshot & ST Outlook May 2014 selling rate (SAAR) was a stronger-than-expected 1.11 mn units up 6.6% from April 2014 and the first time to return to the 1.1 mn mark since November 2013 June s 1.09 mn SAAR was down from May but still stronger than expected Sales are expected to hit 1.07 mn units this year, up 1% from

6 2014 Mexico Sales Body Type Share Movement 0.8% Cars continue their slide, but overall share still dominates market 63.5% market share 0.5% SUVs gain share fueled by Small demand 19.0% market share 0.3% Vans and MPVs experience incremental growth from new entrants 4.2% market share 6

7 North American Light Vehicle Sales Outlook Millions % % 2013: 15.57mn 2013: +3% 1.74mn 7 +8% 2013: 1.06mn

8 Outline Mexico Economic Overview North American Demand Environment North American Production Dynamics Mexico Production Outlook by Manufacturer Summary 8

9 NA Production and Capacity Long-term Trend % Millions % 60% 40% 20% NA Production Underutilized Capacity % Utilization 0% Fundamentally different vehicle production environment Entering post recovery phase where increased NA sourcing and exports drives production expansion - utilization remains 90%+ Demand driven growth takes supporting role, but adds a layer of stability 9

10 NA Production and Sales Gap Narrows ~ 4mn Restructuring Millions NA Sales NA Production ~ 2mn Exports Localization Investment/New Territory

11 North America an Export Hub? Exports 1,875K 862K 1,298K Exports in 2013 were 8% of total production; 2018 expected to be at least 10% Audi plant comes online with exports of Q5 and Q6 expected to Europe and Asia Honda plans to grow exports significantly, with NA being global source for Acura and Insight; volume to SA and EU expected to grow (some of this has been pared back), BEA, Industry Sources 11

12 Production Shift 2000 to 2020 Industry mn mn Other Millions MidWest/Ont. Central US - South Mexico 12

13 Investment Pours into Mexico +3.3mn 11% Millions 15% 18% 67% New Capacity Honda Celaya Mazda Salamanca Nissan Aquascalientes II Toyota Salamanca w/mazda Fiat-Chrysler Saltillo Van Audi San Jose Chiapa Daimler Aquascalientes III w/nissan BMW SLP Kia Monterrey Hyundai? 25% 64% 13

14 Outline Mexico Economic Overview North American Demand Environment North American Production Dynamics Mexico Production Outlook by Manufacturer Summary 14

15 BMW (BMW Mexico) Thousands % 100% 80% 60% $1 billion investment for Mexican facility nearly a lock for 2016/17 1 Series, Z4, and 3 Series Initial capacity of 50,000 units and will build up to 150,000 units by % 20% 0% Capacity utilization is expected to be high, given the models at this plant will not only serve North America, but the global markets as well. Compact Midsize Large Utilization 15

16 Fiat Chrysler (Saltillo, Saltillo Van, Toluca) Thousands % 100% 80% 60% 40% 500 (FF) production dropping in 2016 volume will be replaced with C-SUV Jeep Dodge Journey previously planned to be dropped will continue as a similar but yet defined replacement will push utilization well above capacity at Toluca % 0% Compact Midsize Large Utilization $1.085 billion investment in Saltillo Van facility Promaster (VF) production began in July

17 Ford (Cuautitlan, Hermosillo) Thousands % 100% 80% 60% Fiesta (B299N) dropping from Cuautitlan in 2015 volume to be replaced by Ecosport (B515) Next-gen Focus (C519) and Escape (C542) expected to join Cuautitlan pushing utilization close to 100% % 20% Hermosillo will continue as a source of Fusion/MKZ production 0 0% Compact Midsize Large Utilization 17

18 General Motors (Ramos Arizpe, San Luis Potosi, Silao) Thousands % 100% 80% 60% 40% 20% 0% Beginning in 2016, Ramos Arizpe is projected to start competing with GM s Fort Wayne Truck plant volume With GM s plan to drop the Regal, Verano (D2SB) production is expected to notice a significant bump in volume over the D1SB Improved platform scale next-gen Equinox to move to Delta Timing of the next-gen pickups (T1XX) has been moved up to 2018 Compact Midsize Large Utilization 18

19 Honda (Celaya, Guadalajara) Thousands % 100% 80% 60% 40% New Celaya plant came online starting with the Fit (2WF) this year followed by the HR-V, City, and Civic Initial capacity at Celaya is 200,000 units but is expected to increase to 520,000 units to bolster regional production and increase export activity % 0% Guadalajara will continue as a source of the CR-V Compact Midsize Large Utilization 19

20 Hyundai (Monterrey) Thousands % 90% 80% 70% 60% 50% 40% 30% Kia Monterrey Plant localize small vehicles with displacements of 2.0L and below starting in 2017 Capacity expected at 300,000 units/year Continue to explore further expansion - Hyundai? 50 20% 10% 0 0% Compact Midsize Large Utilization 20

21 Mazda (Salamanca) Thousands % 100% 80% 60% Mazda resumed full production in North America in February with the Mazda3 (J36) at newly constructed facility in Salamanca Mazda2 (J03A) production will begin later this year % 20% 0% Partnered with Toyota, Mazda will produce Small Car models for Toyota and Scion based on Mazda Skyactive-B architecture in 2015 Compact Midsize Large Utilization 21

22 Renault-Nissan (Aguascalientes I,II,III, Cuernavaca) 1, % Aguascalientes II came online with the start of production of the Sentra (L12F) Thousands % 80% 60% Aguascalientes III - partner w/daimler to produce the QX30, GLA, and CLA based on the MFA platform % 20% 0% Nissan B-SUV (W02F) for Mexico at Aguascalientes in 2016 Commercially oriented MPVs NV200 & City Express at Cuernavaca Compact Midsize Large Utilization 22

23 Toyota (Baja) Thousands % 120% 100% 80% 60% Baja remains a source for the Tacoma capacity utilization high in the long-term Venture spirit, investment w/mazda Small Car models for Scion and Toyota to be produced at Mazda s Salamanca plant 20 40% 10 20% 0 0% Compact Midsize Large Utilization 23

24 Volkswagen (Puebla, San Jose Chiapa) Aggressive growth targets; VW 800K US sales, Audi 200K Thousands 1, % 100% 80% 60% Starting in 2016, San Jose Chiapa will be the global source for Q5 (AU426) and Q6 (AU519) - capacity at 200,000 units/year Compact Midsize Large Utilization 40% 20% 0% Given the addition of the Golf (VW370) in Puebla this year, the 600,000 unit capacity plant is expected to be at overcapacity from 2015 onward 24

25 Outline Mexico Economic Overview North American Demand Environment North American Production Dynamics Mexico Production Outlook by Manufacturer Summary 25

26 Summary Light Vehicle sales in Mexico are expected to continue to pick up in H along with an improving economy and reach 1.07 mn units this year North American production passed 16mn in 2013 for first time since 2002 and 2014 continues trend Inventory risk now much lower Long-term North American production is supported by import substitution and increased exports market pushes over 19 million units with substantial increase in launch activity A pronounced shift to Mexico driving the lion s share of capacity growth in the North America region Supplier opportunities exist with 65 new launches (New Entries/Major Redesigns) in Mexico in the timeframe 26

27 Accurate real-time automotive intelligence, forecasting and analysis Thank You 27