Automotive 09 DOWNSIDE ADJUSTMENT IN 2nd HALF OF 2009 Michael Klemen European Markets August 2009
9/8/2009
European automotive markets 2 HY 2009
Summary
• Western European markets are mature while Eastern European countries are still -but much slower-emerging
• In general activities needed to regain profitability•Rethinking of structural expenses and costs
• Western European production cost structures need to decrease eg VW uses twice as many employees as Toyota to generate the same unit of turnover
•Reduce material costs / content costs of vehicle
•Consumers go for cheaper “interior” - hardly any add ons
• Technology is increasingly key, inside vehicle and inside the business “
•We're going from seeing the car as mechanical device with electronic enablers to an electronics device with mechanical enablers." .. tech has become a hook for driving new car sales
• US Dynamics have already heavily influenced WE and this will continue for rest of 2009
• Safe Intelligent Mobility, Green in cars will add to cost side (dynamics of concepts like project Better Place (wants to install around 250,000 charging ports, 200 battery-exchange stations and a control center in the Bay Area by 2012) will appear also in WE on the longer run)
• There is no swift improvement in the outlook for the global automobile industry. 2009 will be another difficult year for most auto markets around the world.
• Automotive factories in Europe are halting and reducing inventory, many luxury car markets in Europe are depressed even though some niches (small cars, cheap cars) start to show some small comeback
• Unexpected adaptions like FIAT/Chysler, MAGNA/OPEL, PorscheVW… more to come ?
• European OEMs still dominate the market but have to face decreasing vehicle sales, while a new level of global interdependence fosters that Asian, Chinese, Indian brands gain more importance
• Car industry suffers from Overproduction: European OEMs stagnated over last few years, while only Asian OEMs increased production in Europe
• Sales fall out in nearly all Truck/Bus areas forces no invest policy in the segment
• Germany is still the largest vehicle production country in Europe with a production output of 6 million vehicles; however its output per employee is the lowest
European automotive overview
9/8/2009
Market downside adjustment
Source: PwC Automotive Institute
9/8/2009
Country Vertical 1 Vertical 2 2008 2009 20102008
Growth2009
Growth2010
Growth2008-2010
CAGR
GermanyAgriculture, Mining and Construction Mining 14 13 14 3,8% -2,3% 3,3% 2,1%Agriculture, Mining and Construction Total 14 13 14 3,8% -2,3% 3,3% 2,1%
Discrete Manufacturing Computer and Electronic Products 3.707 3.609 3.663 7,5% -2,7% 1,5% 1,9%
Industrial and Electrical Equipment 5.703 5.532 5.595 7,2% -3,0% 1,1% 1,5%
Medical Equipment and Supplies 997 966 976 7,1% -3,1% 1,0% 1,5%Other Discrete Manufacturing 3.989 3.867 3.909 7,1% -3,1% 1,1% 1,5%Transportation Equipment 4.645 4.505 4.556 7,1% -3,0% 1,1% 1,5%
Discrete Manufacturing Total 19.040 18.478 18.698 7,2% -3,0% 1,2% 1,6%Process Manufacturing Chemical, Plastics, Rubber 789 767 777 6,4% -2,8% 1,2% 1,4%
Consumables 2.910 2.825 2.858 6,3% -2,9% 1,1% 1,3%Metal, Wood, Minerals, Paper, Publishing 846 821 830 6,2% -2,9% 1,1% 1,3%Petroleum and Coal 588 571 577 6,3% -2,9% 1,2% 1,3%Pharmaceutical and Medicine 961 932 943 6,2% -2,9% 1,1% 1,3%Textiles and Apparel 311 302 305 6,3% -2,9% 1,1% 1,3%
Process Manufacturing Total 6.405 6.218 6.290 6,3% -2,9% 1,2% 1,3%Utilities Electric and Gas 5.445 5.543 5.888 11,5% 1,8% 6,2% 6,1%Utilities Total 5.445 5.543 5.888 11,5% 1,8% 6,2% 6,1%
Germany Total 30.903 30.253 30.890 7,7% -2,1% 2,1% 2,4%
German Industrial IT investment data 2008-10 (source Gartner)
Business demand for
technology-enabled capabilities
continues.
The majority of executives clearly understand the
critical role of business technology in their success.
Eager to infuse innovation into their
operations, these executives often bypass
internal IT functions when selecting
technology suppliers — because they
perceive IT as not being particularly
effective and innovative…
Vertical analysis of a global
survey of 520 IT decision
makers in Feb 2009
Enterprise IT budget changes in
2008 compared with forecasted changes in
2009
Total enterprise expenditure is unlikely to
decrease significantly
Datamonitor April 09
9/8/2009
9/8/2009
Customer Dealer Fleet Car Rental Wholesalers
Creating impact with technology Hot Automotive Areas Today
Product
Definition
Market
OfferingWholesale
Stock Replenishment
Orders
Stock
Inventory
Dealer Sales
Analysis
Delivery Model
CenterAllocation
Capacity
Planning
Operating
Plan
Material
Forecast
Constraints
Management
ProcurementMaterial
Mgmt
Material
releasing
Build
Production
LLP
Late Configuration
Added Value
Services
2nd Hand Car Refur-
bishmen
OUTBOUND
LOGISTICS
Configure Order
Processing
Sales Scheduling
Order Bank
Mfg Scheduling
Order Bank
Marketing
Analysis
Dealer Sales
Analysis
Delivery
Model Center
LLP
Consolidation Warehouse
Added Value
Services
Line Side Inventory Magmt
INBOUND LOGISTICS
Private Mp Portals Tier 1 Tier 2 Tier 3Marketplaces Portals
CRM / ATP
Stock InventoryLead
Management
MANUFACTURING
OP
EX
–E
BIT
-R
ethi
nk s
truct
ural
cos
ts
-Red
uce
mat
eria
l cos
ts, c
onte
nt c
osts
of
veh
icle
Customer Relationship Management & Available to promise
Demand Planning / Demand & Supply Matching
Inbound LogisticsManufacturing Plant
OptimizationOutbound Logistic
Hot today :
Faster new Model Developments
Collaborative PLM
Technology increasingly key inside vehicles and inside the business
9/8/2009
Customer
Order
Suppliers
Production Suppliers
Cooperation Development
Suppliers
Creating impact with technology The Automotive Production Template
Body & ChassisPress linesBody shop
Body-in-White
Shop Floor PROP
Pre Production
Chassis
Pre
Production
Bodyparts
PreProduction
Exterior/Interi or Drive
Train
Assembly
Delivery
ERPAPO
most likely SAP or ORACLE
Manufacturing Execution System
PAINT SHOP
Electro Coating Drying
Varnishing
MAIN ASSEMBLY
Engine, Drive Train, Transmission FINAL
ASSEMBLY
Interior
ExteriorBuf
fer
Buf
fer
Buf
fer
Buf
fer
Buf
fer
Buf
fer
Buf
fer
Buf
fer
Logistics Flow
Messaging/Alert Flow
SAP xMII Shop Floor
Shop Floor
SAP MII(?)
Shop Floor
Final LayoutOrder
TestEngine
SAP / ORACLEWLAN LAN WANSeconds Minutes
Batch
IE3000 WLAN microsecInside the cell
9/8/2009
Creating impact with technology The switch from traditional IT to new mindsets
9/8/2009
But Look at the Bright Side of Life !
201y - 201z
+x%
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