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Emerging Business Opportunity Technology Advancements 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 North America South America Europe China India Russia Next 11 RoW Units MCV HCV 2016 Key Highlights 2017 Top Predictions Global Medium Duty (MD)-Heavy Duty (HD) truck sales recovered by 5% over 2015 levels driven by demand recovery in China, India and Europe.VW’s equity stake in Navistar marked the group’s entry into North America Global Medium and Heavy Truck Market Forecast 2017 Levels of Automation In 2017 OEM Focus Will be Primarily on Platooning and Level 3 Automation What are the Services Mobile Apps can Offer? Big Data and applications such as traffic prediction, sensors and terrain/weather mapping, ITS through mobile integration and social media integration will make decision making faster and proactive rather than reactive. Truck of the Future Platooning CV Market: Levels of Automation, Global, 2016–2030+ 2030+ 2015 Enabling Technology: None Driver Involvement: Very high Vocational Application: Long haul, regional, vocational Enabling Technology: V2X:V2V+ V2I, DSRC, integrated safety systems (ISS), cameras, sensors, ACC Driver Involvement: Moderate Vocational Application: Long haul, regional, vocational Enabling Technology: Electric power steering (EPS), electric braking systems (EBS), electronic throttle control, ACC, ADAS Driver Involvement: High Vocational Application Long haul, regional, vocational Enabling Technology: Inter-section assist, redundancy back-up for connectivity, self-driving capability until driver takes over control Driver Involvement: Moderate-low Vocational Application: Long haul, regional, vocational Enabling Technology: Multiple redundancies (hardware) and artificial intelligence (software) Driver Involvement: None Vocational Application: Long haul, regional, vocational 2018 $5,000 Incremental Costs $15,000 $25,000 Driver Hygiene Occupation Support “Green” Eco-friendly • Fuel-efficient • Connected • Business-ready • Crash-free • Driver-friendly • Autonomous • “Smart” “Safe” Cost Optimization Asset Monitoring 3PL/ Brokerages Loadboards On-demand (Uber of Trucks) $30,000+ 1 2 3 4 2022 2028 Driver Utility Apps Fleet Optimization Apps Freight Mobility Apps Global MD-HD truck market is expected to absorb 90,000 additional units in 2017; MCV’s share will increase by 2% on account of slumping demand in HD-heavy markets such as North America and Europe Digitization Enabling Industry Evolution towards Service/Solution Model Confluence of technologies in the Industry Providing Platform for Various Stake Holders to Build Service and Solution Based Revenue Models Why Digital Freight Brokerage Freight brokerage can be automated using digital technologies thereby driving greater transparency between shippers-carriers and supporting d-hoc and planned freight demands at lower brokerage rates Trucking Challenges Propelling Digitalization Capacity underutilization, escalating operational costs, driver retention and rising GHG regulations are the key challenges that fleet managers face globally that can be addressed by digital technologies. Key Challenges for Trucking Industry, Global, 2017 Shipper calls and/or faxes shipment details to freight broker Traditional Freight Broker Automated Freight Broker Freight broker negotiates rates before calling potential carriers in their network to find a match Carrier negotiates transport rates with broker Carrier is notified of load match digitally, freight rates are fixed (5%-10%) Increases Efficiency / Shortens Supply Chain Reduction in Cost / Increase in Profitability Automated solution automates the load matching process and finds the best carrier Shipper enters load details into digital platform Global MD-HD Truck Powertrain Technology Forecast Diesel expected regain some of the lost market share to alternatives with diesel truck sales accounting for 94.6 percent of total sales in 2017 as opposed to 93.1 percent in 2016 CV Market: Medium and Heavy Trucks-Unit Shipment, Global, 2016 and 2017 CV Market: Powertrain Technology Split by Region, Global, 2017 Powertrain Split (%) 0.0 94.6 1.9 0.6 2.9 100.0 3.2% YoY Growth 2016 Regional Shares Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea,Vietnam, and Bangladesh. MCV: 6T to 16T HCV: 16T and above Gasoline HEV NG Diesel 2.78 MILLION 2016 62% 38% 2.87 MILLION 2017 60% 40% As sales increases by 90,000 units in 2017, industry will increasingly focus on offering integrated service based solutions to fleets and owner-operators to maintain and grow margins Recovery in China and India was Overshadowed by Weakness in the Americas Truck sales recovery in China, India and Europe propelled global truck sales by 5 percent; Truck demand hit historical lows in South America as economic environment remains precarious in Brazil Value Truck Platforms Attracting Maximum Traction Globally More than 60% of new platform development in the next 2–3 years is expected to be in the value trucks segment. This is largely driven by the growing demand for value trucks in emerging markets, especially China and India. A majority of the trucks built on such platforms is expected to fall in the price range of $65,000–$86,000 Freight Mobility Connectivity Technologies Online Mobile Ecosystem Big Data/IOT Autonomous Technologies Core Trucking Industry Challenges Digital Transformation Telematics/ FMS Trucking Apps Freight Mobility Autonomous Trucking Business Model Change: Truck as a Service Automated freight brokers are able to take lower commissions (5%-10%) than traditional brokers (15%-20%) due to the usage of algorithms which streamline the process and pass on the savings Autonomous Trucking Confluence of Technologies Truck as a Service Fleet Operations Freight Efficiency CO 2 /GHG Challenges Driver Management Trucking Apps
