Fleet business in BRIC and emerging markets. Munich, March 2014

Transcription

1 Fleet business in BRIC and emerging markets Munich, March 2014

2 Now is the time to prepare for future growth in fleet business Especially in BRIC and emerging countries in Asia and S. America Executive summary > The EU-5 fleet markets are mostly saturated and, due to the European car crisis, their future outlook is only modest in terms of sales potential and profitability > The BRIC fleet markets are past the introductory phase and show signs of expanding and maturing Annual fleet sales are currently approx. 2.5 million units and expected to rise steadily > And beyond BRIC, other emerging countries are becoming more important and offer attractive growth potential compared to the challenging EU-5 markets > A fleet market expansion concept for BRIC and growth markets helps professionalize and develop fleet business and improves the effectiveness needed for leveraging the impending upswing > An integrated approach is needed to take advantage of the currently low opportunity costs and take into account lengthy development and implementation times 2

3 Contents Page A. Significance of fleets in emerging markets Fleet sales in emerging markets offer the potential to increase sales volumes beyond the challenging European markets 4 B. Fleet professionalization in BRIC and emerging markets To participate in future growth, we highly recommend a fleet market expansion concept for BRIC and emerging countries 9 Roland Berger Strategy Consultants 3

4 A. Significance of fleets in emerging markets 4

5 Global light vehicle sales will increase by 20 million units by 2019 Growth driven by BRIC and other emerging markets Light vehicle sales 1) [m units] North America Western Europe +2% Central/Eastern Europe +5% China +7% World +4% +2% India +9% Japan/Korea -1% South America +4% Rest of World +3% ASEAN +4% CAGR [%] 1) Passenger cars and LCVs Source: IHS; Roland Berger 5

6 Well-established fleet business in EU-5 markets with moderate prospects BRIC countries significantly gain in importance Fleet business in EU-5 and BRIC markets Estimated share of fleet sales [%] 62% 38% EU-5 EU-5 1) 54% 39% 36% 46% 61% 64% > Still going through economic hardship > Automotive fleet market outlook with moderate prospects > Challenging competitive environment 48% 52% BRIC 2) 26% 13% 13% 9% 74% 87% 87% 91% BRIC > Positive long-term trend remains sound based on GDP and business growth > Fleet business in BRIC countries is on the verge of becoming more developed Share of fleet sales Share of private sales 1) Incl. rentals, dealers and OEM registrations 2) Estimates Source: Dataforce; National Information Center; Roland Berger 6

7 Even beyond the BRIC countries, there are interesting growth markets with opportunities for fleet business ASEAN South America Indonesia Thailand Malaysia Philippines Turkey Argentina Colombia Vehicle sales [m units, CAGR] % % % % % % % 0.6 Top Seller Toyota Avanza MPV Isuzu D-Max Pickup Perodua Myvi Hatchback Toyota Vios Sedan Fiat Linea Sedan Volkswagen Gol Hatchback Chevrolet Aveo HB + Sedan Fleet sales ~20-30 ~20% ~10% ~10% ~15% ~10% ~5% share 1) Reg. businesses ['000 #] 2) ) Estimates 2) Latest year available Source: Worldbank; Econstat; IHS; automotive-fleet.com; Roland Berger 7

8 To participate in the long-term growth opportunities of BRIC and other emerging markets, OEMs need to act now Global fleet environment today Sales pressure in Europe today > Fleet business in Europe has become increasingly challenging > Sales opportunities in fleet are developing in BRIC and other emerging countries > Use current pressure from global volume targets for expansion and globalization of fleet business > Implementation of fleet market entry concept takes time (~12 months) > Fleet business relationships in emerging markets are establishing now Long-term growth in emerging countries Need for action Source: Roland Berger 8

9 B. Fleet professionalization in BRIC and emerging markets 9

10 A one-size-fits-all approach will not work Market-specific approach is needed instead OEM "Readiness" > Market position B2B/B2C > Retail network > KAM potential > Production footprint > etc. High Low Low Develop/ push Growth markets Build BRIC Market maturity Defend EU-5 Catch up > Market volume/growth (fleet) > Competitive intensity > Share of (full service) leasing > Significance of TCO > etc. High Assess attractiveness Derive market strategy Adapt processes, toolkits Source: Roland Berger 10

11 A professional, modular fleet business concept helps improve both the efficiency and effectiveness of fleet sales Pyramid structure of fleet operations Level of sophistication 4 4 Market sophistication > All processes to operate professional fleet business fully established and at the highest stage of expansion/sophistication Market expansion > Further processes for active market expansion, including special marketing campaigns as well as detailed monitoring and controlling tools Market basics > Basic processes required to fully operate a fleet business > Refinement and enhancement of "market entry" stage, incl. additional processes as well as improved systems and tools Market entry (no prior sales) > Key processes must be in place to start selling fleets > Hands-on process design with low level of system sophistication Source: Roland Berger 11

12 Besides developing a general fleet concept, emphasis must also be on (local) implementation Approach to professionalizing fleet operations Analyze status quo Develop ideal fleet concept > Market structure and size > Customers > Competitors > Regulatory environment > Status quo of local fleet business > Organization/ structure > Dealer network > Initial improvement areas > Align with local conditions > Priorities for localization > Fleet strategy > Planning, monitoring, support > Acquisitions > Sales and customer management > Contract management > Dealer management > RAC business > Reporting > Monitoring External market analyses Internal analyses and quick wins Countryspecific adaptation of concept Processes Organization Operational implementation Tools and systems Operation of fleet business Concept focus Implementation focus Source: Roland Berger 12

13 Market-specific hurdles need to be overcome in BRIC countries to successfully adapt, design and implement the strategy What is the problem? What do I need to do? Segmentation & guidelines > Lack of customer insights due to poor data transparency > Conduct primary research > Commit to data sharing Fleet-specialized dealers > Blind implementation using retail concepts from mature markets > Adapt retail concepts > Develop alternative concepts Field consultants > Low awareness and expertise for fleet business among field force > Train & incentivize field force > Provide them with the necessary tools Performance management > Capturing sales performance on dealer level is a challenge > Establish a reliable performance measurement system % Pricing policies > Simplistic incentive schemes leading to unexploited customer relations > Adapt advanced concepts & develop intelligent incentive schemes Fleet organization > Lack of strategy & internal alignment > Scarcity of fleet resources > Establish wholesale structures with dedicated resources and processes Fleet marketing > Lack of structured marketing approach for fleet > Derive fleet marketing plan according to local market requirements After-sales & financial services Key account management > Different customer requirements in after-sales and financial services > Difficult to identify buying center and build relationships > Only offer and develop services suited to local market standards > Train key account managers in local market practices and implement CRM Source: Roland Berger 13

14 Fleet professionalization defines all the factors between the NSC and dealers necessary for successful operations The result of fleet professionalization Segmentation & guidelines Fleet segments known and guidelines defined Fleet segments NSC Fleet-specialized dealers Strategy executed by dealers Fleet size Big Medium Small Responsibility % Field consultants Support is effectively delivered to dealers Performance management Sales performance managed and promoted Pricing policies Incentive levels and rules stipulated Fleet organization Functions and internal resources deployed Fleet marketing Marketing approach and activities defined Number of companies Dealer After-sales & financial services Service offer outlined Key account management Key accounts and potential candidates served Source: Roland Berger 14

15 CASE STUDY: CHINA China: Main fleet customer groups differ regarding holding periods, regional coverage, decision-making processes and criteria Structure and characteristics of customer groups (example using China) Government Taxi companies Police Leasing companies Insurance companies Holding period <5 years 1) 4-8 years 8-10 years 3-5 years 5-6 years Regional coverage > Capital: Group purchasing for all central authorities > Other cites: Local purchasing > All cities: Each city does its own purchasing > Capital: Group purchase for Ministry of Public Security > All cities: Local purchasing > Big cities: Central purchasing at headquarters such as in Beijing and Shanghai > Big cities: Central purchasing at headquarters such as in Beijing, Shanghai and Shenzhen Decisionmaking process > Central ministries: Central purchasing through public tenders > Local governments conduct public tenders, but each department manages its own transactions > Local taxi mgmt. bureau determines a shortlist of taxi models and brands > Taxi companies or individual taxi drivers determine their preferred model based on a shortlist > National or local Ministries of Public Security carry out group purchasing through public tenders > Companies purchase centrally through tenders > Companies purchase centrally through tenders 2) Decision criteria > Brand fit to official profile > After-sales service centers and discounts > Price (needs to be within certain range) > Price > Fuel efficiency > Maintenance cost > Quality/reliability > Quality > Price > Price > After-sales service network coverage > Brand recognition > Price > Brand > After-sales network coverage 1) New officials often buy new staff cars after a change in administration 2) Some companies also contact OEMs or dealers themselves instead of using public tenders Source: Industry expert interviews; Roland Berger 15

16 Your expert contacts for further questions Name Dr. Marcus Hoffmann Jan-Philipp Hasenberg Stephan Keese Brazil Position Partner Principal Junyi Zhang Contact Roland Berger Strategy Consultants Automotive Competence Center Mies-van-der-Rohe-Str Munich Germany Roland Berger Strategy Consultants Automotive Competence Center Am Sandtorkai Hamburg Germany China Joost Geginat ASEAN Phone +49 (89) marcus.hoffmann@ rolandberger.com +49 (69) jan-philipp.hasenberg@ rolandberger.com Wilfried Aulbur India Source: Roland Berger 16

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