Where s the Growth in Europe?

Transcription

1 GLOBAL INSIGHT AUTOMOTIVE SEMINAR SEPTEMBER 27 FRANKFURT Where s the Growth in Europe? Ulf Nord Executive Managing Director

2 West European Car Sales (YTD August 27) % change Average YTD Growth: -.1% +23%! 14% 1% 6% 2% -2% -6% -1% FINLAND GERMANY AUSTRIA DENMARK BELGIUM SPAIN FRANCE PORTUGAL UK N'LANDS GREECE SWEDEN IRELAND -14% SWZ'LAND ITALY NORWAY Copyright 27 Global Insight, Inc. 2

3 East European Car Sales (YTD August 27) % change 3% 25% 2% 15% 1% 5% % -5% -1% -15% -2% -25% TURKEY HUNGARY Average YTD Growth: +17% SLOVENIA CZECH REPUBLIC ROMANIA UKRAINE POLAND RUSSIA Copyright 27 Global Insight, Inc. 3

4 Car Sales (Millions) Trend Level of West European Market Prolonged Current Cycle Reflects Pressured Consumer Sector 15 Late 8's Boom Time 's Oil Shock Early 8's Recession '93 Recession Oil price hinders sales recovery 3 W.E. car market has basically converged to long-term trend '6 '64 '68 '72 '76 '8 '84 '88 '92 '96 ' '4 '8 '12 Copyright 27 Global Insight, Inc. 4

5 Market Crawls Towards Saturation in W.E. 1% 95% 9% 85% 8% 75% 7% 65% Percent of New Car Sales That Replace Scrapped Cars 6% Copyright 27 Global Insight, Inc. 5

6 The Car Parc Youth Indicator 36% Percent of Passenger Car Parc That Is Less Than 4 Years Old 34% 32% 3% 28% 26% 24% Germany France United Kingdom Italy Spain W.E. Average Copyright 27 Global Insight, Inc. 6

7 Western Europe Car Sales Outlook (s) 4, 3,5 3, ,5 2, 1,5 1, 5 AUSTRIA BELGIUM SWITZ GERMANY DENMARK SPAIN FINLAND FRANCE UK GREECE IRELAND ITALY NL NORWAY PORTUGAL SWEDEN Copyright 27 Global Insight, Inc. 7

8 High Car Tax Countries Have Growth Potential 4 35 Car Sales Per Thousand of Total Population DENMARK FINLAND GREECE NORWAY PORTUGAL WE Copyright 27 Global Insight, Inc. 8

9 Russia: the Best Performing Market in the World. Almost USA JAPAN GERMANY TURKEY SPAIN INDONESIA KOREA UKRAINE CANADA ARGENTINA IRAN ITALY INDIA BRAZIL RUSSIA CHINA Change in LV sales and ranked by ,166 (s) , 1,2 1,4 1,6 Incremental Change in Vehicle Demand Copyright 27 Global Insight, Inc. 9

10 The Russian Market Is in Maximum Growth Phase Firing On All Cylinders Market Driver Commodity Prices Exchange Rate + - (s) 1,8 Tariff Barriers Investment Risk Investment Incentives WTO 1,6 1,4 1,2 January July 27 Foreign Brand Sales Growth 67% Population Dynamics Emissions Levels Motorisation Rate 1, 8 Consumer Spending 6 Credit and Finance Markets 4 Dealer Development 2 Brand Competition Car Prices Product Activity '98 '99 ' '1 '2 '3 '4 '5 '6 '7 Sales of New Foreign Brand Cars Copyright 27 Global Insight, Inc. 1

11 and Is Fast Becoming the Most Attractive Market in Europe 4, 3,5 3, Car Sales (s) 2,5 2, 1,5 1, DEU ITA GBR FRA ESP RUS Copyright 27 Global Insight, Inc. 11

12 From Now On Most Rewards Will Come to Those Who Invest in Local Production Russian Car Sales by Type (s) 4, 3,5 Foreign brands made in Russia Russian makes 3, 2,5 2, Foreign brand imports 1,5 1, Copyright 27 Global Insight, Inc. 12

13 Poland Had Problems With Used Car Imports in the Past, But Never on Such a Big Scale (s) New Cars Used Cars F'cast Copyright 27 Global Insight, Inc. 13

14 But the Polish Car Market Is Finally on a Rebound (s) Copyright 27 Global Insight, Inc. 14

15 Key Factors Influencing New Car Sales Growth Outlook in Poland Used Cars Still a Restraining Factor - Market is saturated with masses of second hand cars Second hand car prices have gone down Depressed residual values of cars means that the trade up is more expensive Buyers are price sensitive, hence majority will opt for a used car BUT: Outlook Recently Upgraded Strong economy has started to translate into growing incomes and consumer spending. Labour market is tightening. As financial situation of households improves, more buyers opt for a new car Company car buying has increased substantially, as a result of rapid expansion of foreign investment in the country Consumer credits and leasing options are widely available New sales order levels are showing stronger than expected pick-up Copyright 27 Global Insight, Inc. 15

16 The Ukrainian Car Market Has Experienced Exponential Growth in the Past Six Years Demand for new cars in Ukraine rose from just 61,7 units in 2 to 37,7 units in 26 It will be the second biggest new car market in the EE region after Russia This sales explosion is a result of several factors: The Ukrainian economy continues to thrive on the back of strong domestic demand Consumer spending is backed up by rapidly growing wages and household incomes Consumer credit has taken off Dealership network is expanding rapidly across the country Local manufacturers have begun to make investments in new products (s) '2 '4 '6 '8 '1 '12 Copyright 27 Global Insight, Inc. 16

17 Ukraine: Importance of CIS Brands in the Local Market Is Decreasing Rapidly (s) CIS Brands Other Brands Copyright 27 Global Insight, Inc. 17

18 Ukraine: Upwardly Mobile New Passenger Cars Sales by Price Range (s) Ukrainian Car Market Is Price Sensitive, However, Mix Is Improving Up to 4, 4,- 6,5 6,5-1, 1,- 15, 15,- 22, 22,- 35, Over 35, Copyright 27 Global Insight, Inc. 18

19 Mainstream Car Sales (Millions) Premium Car Sales (Millions) Trend Level Demand in European Market (EU 28) 13 Mainstream Premium Copyright 27 Global Insight, Inc. 19

20 Downsized Premium Segment (s) Lancia Y Volume Mini re-launch (& Variants) Mkt Share Alfa & Audi '96 '98 ' '2 '4 '6 '8 '1 '12 5% 4% 3% 2% 1% % Significant growth potential B+ or B2 niche segment Massive pool of customers from B & C Segments (attractive demographic) Fuel efficiency, low CO 2 with high image & style Mini offers casebook brand management success story Copyright 27 Global Insight, Inc. 2

21 Segment A Product-led growth (s) 1,6 1,2 8 4 Consumer interest slides Volume Renewed Interest Mkt Share Eco Push Holds buyers interest with product aging '96 '98 ' '2 '4 '6 '8 '1 '12 12% 1% 8% 6% 4% 2% % Robust outlook Plus points : fuel efficiency, low CO 2, easy to park, affordable & stylish BUT lack interior space, luggage space, limited people moving capacity Limits customer pool (demographic) Model count expanding but still low compared to higher segments B-car has higher marginal utility (bang for buck) Eco push after could mean further volume growth Copyright 27 Global Insight, Inc. 21

22 SUV Segments (s) 2, 1,5 1, 5 Hardcore Offroad Lifestyle esp. Premium SUV-B SUV-C SUV-D SUV-E Crossover '96 '98 ' '2 '4 '6 '8 '1 '12 Good growth prospects despite CO 2 YTD7 7 SUVs gain one percentage point of share over in in 1 Premium SUV share reliably >3% 3k units m units m units 212 New Mainstream brands targeting SUV (esp. Ford/GM & French) Ongoing premium activity (esp. lower segments) Copyright 27 Global Insight, Inc. 22

23 Summary Russia, Ukraine and Poland alone will power 67% of all total European car sales growth over the next five years Real volume growth in Mature Europe is going to be hard to find Segment development is rather benign with only a few obvious growth opportunities Picking the right OEM : Its going to be a hard grind for everyone with no run-away winners True growth prospects in Europe lies in the sub-market sphere At the Fuel and Powertrain level In application of new technologies In new Eco orientated Sub Brands Much of it driven by Public Policy action and EU Legislation Copyright 27 Global Insight, Inc. 23

24 GLOBAL INSIGHT AUTOMOTIVE SEMINAR SEPTEMBER 27 FRANKFURT Thank You Ulf Nord Executive Managing Director