Date post: | 16-Apr-2017 |
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Today’s Presenter
Functional Expertise10+ years of global commercial vehicle technologies and markets expertise, which include particular focus on areas such as
- Global commercial vehicle industry growth opportunities, and market penetration and growth strategy development
- Advanced truck technologies- powertrain, chassis, safety, telematics and regulation compliance technologies
- Global research and consulting management, global business development and team-building, CXO level revenue and market share growth strategy development
Sandeep Kar, Global Vice President
Frost & Sullivan
Follow me on:
ca.linkedin.com/pub/sandeep-kar/1/942/958/en
Disclosure: Sandeep serves in the advisory board of Transfix and Vaahika, and board of South End Travels
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2015 Key HighlightsGlobal MD-HD truck sales declined by 5 percent over 2014 on account of weak demand in China
1China Changed the Game, LATAM’s Rise Got Overshadowed by Brazil’s Weakness
China and LATAM dealt a 120 Thousand unit blow to overall global medium-heavy duty truck sales.
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Low Oil Prices Both a Boon and Bane
Low and volatile oil prices had both a positive impact (driving sales in emerging markets such as India, enablingfleets in diverting opex towards capex, and improving margins in markets such as North America and Europe) anda negative impact (several economies such as Russia, Canada, South America experienced recessionarypressures).
3
Daimler Extended Dominance; Asian OEMs on the Rise
Daimler continues to dominate the global market through effective product and brand strategies across the world.Asian manufacturers started to gain traction as product focus slowly moved from low-cost to value trucks in theglobal market.
4
Initiative towards CO2/GHG Reduction
OEMs and engine suppliers activities for reaching fuel efficiency targets for Euro 7 and EPA 2018 centeredaround technologies such as powertrain-optimization, driveline-optimization, light weighting, down-speeding,downsizing, and aerodynamics.
5Mobile and Online Freight Brokering Revolution Gained Traction
2015 experienced rapid growth of mobile based freight brokering (aka Uber for Trucks) in markets such as NorthAmerica and Brazil, while online freight aggregation gained traction in markets such as India and Europe.
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Note: Data collected from 2014-2015 interviews and discussions with Sr. Managers to CEO-level executives of truck OEMs and tier-1 suppliers in North America, Europe, Asia-Pacific, China, India, Latin America, and other regions
Source: Frost & Sullivan.
CV Outlook 2016: Senior Management Top-of-Mind Issues, Global, 2015-2016
2015–2016 CV Industry Senior Management Top-of-Mind IssuesDespite a weak global economic outlook and fuel price volatility, proliferation of electronics-enabled service-oriented business models will propel the global MD-HD truck market towards new and lucrative revenue streams.
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Source: World Bank, Frost & Sullivan
RegionGDP Growth
Estimates: 2016 (%)YoY MCV
Growth (%)YoY HCV Growth
(%)YoY Overall CV
Growth (%)Market
Opportunity
North America 2.7–2.8 5.4 (9.3) (2.7) Low
South America 1.4–1.5 (12.0) (9.5) (10.7) Low
Europe 1.6–1.7 1 6.2 5.1 Moderate
China 6.5–6.6 (2.1) (3.6) (3.2) Low
India 7.6–7.9 26.6 31.8 30.0 High
Russia (0.5)–(1.0) (2.5) (14.1) (10.8) Low
Next 11 5.5–6.5 5.4 6.5 6.0 High
RoW 4–5 7.8 8.8 8.3 High
Global 2.6–2.9 4.7 1.0 2.4 Moderate
CV Market: GDP and CV Growth Outlook Overview, Global, 2016
2016 Global GDP and Commercial Truck Market Growth OutlookThe global economy is likely to grow at 2.6%–2.9% over 2015 while the global CV market is expected to grow at 2.2%, showing the rising and continued trend towards decoupling of truck demand relative to GDP.
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CV Market: Medium and Heavy Trucks-Unit Shipment, Global, 2015 and 2016
2.4% YoY Growth
2016 Regional Shares2.62 million 2.68 million
48%
48%
27%
52%
41%
22%
51%
55%
38%37%
63%
52%
52%81%
73%59%
78%49%
45%
62%
Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea, Vietnam, and Bangladesh.
Un
its
MCV: 6T to 16THCV: 16T and above
19%
Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan
Global Medium and Heavy Truck Market Forecast 2016The global MD-HD truck market will absorb 60,000 additional units in 2016; MCV’s share will increase marginally by 1% on account of slumping demand in HD-heavy markets of China and North America.
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GVWR (kilogram)
Pri
ce
($
)
CV Outlook 2016: Highest-selling Weight Segment in Each Region, Global, 2015 and 2016
Bubble size: Sales units of the top segments in each region
Bubble with map: Data points for 2016
Bubble shadow: Data points for 2015
Attractive MD-HD Truck Segments by RegionSlowdown in HD demand in China and North America and rise in value truck and MD Truck demand will push weighted average global GVWR to 22-23 MT; $40-65 thousand will emerge as the most active price bandwidth
Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan
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CV Market: MD-HD Truck OEM Performance, Global, 2015
Others: Next 11+ RoW
Units
Exposure in China and LATAM impacted Volvo's global truck output; As part of restructuring, the company is streamlining business units on brand lines. (Volvo, UD, Mack and Renault Trucks namely)
Contracting Chinese truck market severely impacted domestic OEMs
Consolidation of MAN and Scania brands to be the focus for 2016 within the VW Group; however, emission compliance issues from the PV business likely to impact CV business in the short term as the Group restructures its business
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
MD-HD Truck OEM Sales Performance 2015Daimler remained the world’s largest MD-HD truck supplier and increased its global sales figures; OEMs with exposure to China and LATAM lost ground on global market leadership.
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Key 2016 Market Introductions—Truck Platforms, Powertrain LaunchesGlobal OEMs to focus more on soft technology upgrades that target mid-market (value truck) than new product launches
VO
LV
O
Gro
up
Ind
ia FMX 520 dump truck
FMX 480 dump truck
PA
CC
AR
No
rth
Am
eri
ca
Kenworth & Peterbilt trucks with MX-11 engine
DA
F
Eu
rop
e
New LF series distribution trucks
Tata
M
oto
rs
Ind
ia
Signa range of value Trucks
Isu
zu
No
rth
A
meri
ca
New NPR Diesel MD trucks
Fo
rd
No
rth
A
meri
ca
F 650-750 Class 6 & 7 Trucks
Daim
ler
No
rth
A
meri
ca
/Eu
rop
e
Mercedes-Benz Econic
dual control trucks
AP
AC
/Th
e M
idd
le E
ast/
Afr
ica
Fuso super low roof canter
New Actros
Arocs super heavy duty trucks
Unimog U4000 and U5000
Freigthliner Coronado with Cummins ISX e5
MA
N
AP
AC
TGX-D38
Navis
tar
No
rth
A
meri
ca
Premium vocational trucks C
um
min
s/
Westp
ort
No
rth
Am
eri
ca ISL G Near Zero (NZ)
NOx Natural gas engines
Westport ISB6.7 G, medium duty Natural Gas (NG) engine
Image Source: Company Brochures. Source: Frost & Sullivan
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CV Market: Powertrain Technology Split by Region, Global, 2016
Po
we
rtra
in S
pli
t (%
)
Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea, Vietnam, and Bangladesh. Source: Frost & Sullivan
Global MD-HD Truck Powertrain Technology ForecastChina and NA will show greater preference for alternative fuel powertrain systems; despite strong head winds, NG penetration will reach 4.8%.
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Engine Platform Design Harmonization 2016-2022Emission compliance above Euro 4 standards, displacement range of 9 to 11.5L, power rating of 280-420 HP and price range of $7,000-14,000 emerging as ideal specifications for truly global platforms for 2016-2022 period
Price ($)Power Range (HP)Displacement (L)Emission Norms
Strong Trend Towards 2022 Moderate Trend Towards 2022
CV Market: HD Truck Engine Platform Requirements, Global, 2016–2022
Best Fit Latin America China India North America Europe Africa
200
100
300
4.0
2.0
8.0
6.0
12.0
10.0
400
600
500
Euro II
Euro I
Euro IV
Euro III
Euro VI
Euro V
14.0
10,000
5,000
15,000
20,000
30,000
25,000
Source: Frost & Sullivan
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Product Segments Outlook-2016Mid-market value truck segment to gain 2 percent segment share in 2016; Despite Challenging Market Environment, China to Account for 40 Percent of Global Value Truck Market
17%
36%
47%
35%
19%
46%
CV Market: Unit Shipment by Product Segment, Global, 2015 and 2016
~2.61 Million
~2.68 Million
Value Truck Sales, Global, 2016
Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan
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CV Market: Connected LCV and M/HCV Contribution, Global, 2015, 2016, and 2022
Key: LCV: Light Commercial Vehicles; M/HCV: Medium/Heavy Commercial Vehicles
2015 2022
53.6%
46.4%
2016
17.1M
41.5M
Dominance of owner operator vehicles, and un-organized fleet structure limits telematics adoption
53.3%
46.7%
Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan
Global Connected LCV and M/HCV Contribution—2015, 2016, and 2022India and LATAM will grow considerably by increasing their respective contributions towards the global installed base, while Europe and North America will continue to lead the overall telematics market.
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Driver
Mgt.
Fuel
Mgt.
Vehicle
Management
Order
Management
Warranty
Optimization Prognostic & Repair
Management
Driver
Behaviour and Training
Advanced Driver
Assistance System
Integration
Usage based
Insurance
Automated Driving
/ Platooning
Transport
Management - TMS
ENVIRONMENTSAFETY
ACCESSIBLE AFFORDABLE
Re
ve
nu
e
Ge
ne
rati
on
Pro
fit
Ge
ne
rato
r
Evolving Service OpportunityBusiness model of connected truck is like an “Iceberg”; most important revenue generators are not yet seen
$3.5 Billion Today
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2016 Top 6 PredictionsAs sales increases by 60 thousand units in 2016, the industry will increasingly focus towards offering cost-effective business ready solutions for fleet industry
1Global Sales to Hit 2.68 Million as the World Economy Grows in the Range of 2.6-2.9%
Growth from India, Europe and RoW (rest of world) markets to increase global truck out put by 2.4 percent.China to contract marginally by 3.2 percent to reach 750K units in 2016, a 300K drop from 2014 peak.
2OEMs Now Concentrating on Both Truck and Powertrain Platforms
By 2022, more than ½ of the global heavy duty truck engine production slated to feature platform basedlineage.
3Fuel Price Volatility to Impact Green Technologies In the Short-term
Short term headwinds from the fuel market to impact adoption of advanced powertrain technologies such asNatural Gas and Hybrid-Electric. Global natural gas adoption to reach 4.8 percent in 2016.
4Telematics Solutions to Become Top Differentiation Strategy
Developed markets will draw attention towards advanced services such as driver behavior management, videosafety and prognostics, while emerging regions will experience a shift from basic to mid-tier services.
5Global Truck Manufacturers and Suppliers Shifting Focus from Products to Services
Rise in interest and adoption of technologies such as telematics, safety, video based monitoring, prognostics,asset maintenance, platooning, online freight aggregation, mobile based brokering, etc
6Low-Cost and Premium Trucks to Lose Market Share to Value Trucks
After gaining market share for over 8 years, low-cost and premium trucks will cede 2 percent market share tovalue trucks (mid-market trucks that are higher priced than low-cost trucks but lower than premium trucks)
Source: Frost & Sullivan.
NORTH AMERICAN COMMERCIAL VEHICLE HEAVY TRUCK OUTLOOK
Frost & Sullivan Live
Webcast
March 24, 2016
Eric StarksPresidentChairman & CEO
888.988.1699 [email protected]@EricMStarks
www.FTRintel.com
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BUILD VS ORDERS –LINING UP HISTORICALLY
Source: FTR Truck and Trailer Outlook Service
Net Orders
9 month moving avg
Monthly Build
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NEW TRUCK LEAD TIME
Months
Source: FTR Truck and Trailer Outlook Service
Likely Production Cuts
Likely Increase In Production
27
CLASS 8 INVENTORY/RETAIL SALES RATIO – NORTH AMERICA
Months
Source: FTR Truck and Trailer Outlook Service
Likely Production Cuts
Likely Increase In Production
30
U.S. CLASS 8 DEMAND: NORMAL CYCLE TIMING…EDD IS BELOW SALES
Sources: FTR N.A. Commercial Truck & Trailer Outlook ReportSales history ties to Ward’s Automotive Group
3131
N.A. CL8 PRODUCTION OUTLOOK
History ties to Wards Automotive
Source: FTR Truck & Trailer Outlook
© 2016 Eaton. All Rights Reserved..
Eaton Corporation2016 Global Medium-Heavy Truck Outlook
Jeff WalkerMarch 2016
34© 2016 Eaton. All Rights Reserved..
Eaton is a global power management company
Eaton Truck industry
Electrical Fluid Mechanical
$20.9Bn
35© 2016 Eaton. All Rights Reserved..
U.S. Linehaul Fuel Consumption walk, “Reg-to-Reg” 2018-2030
Imp
rove
me
nt
in F
ue
l C
on
su
mp
tio
n
(lit
ers
/10
0 k
m, p
en
etr
ati
on
-we
igh
ted
)
vs
. 2
01
7 b
as
elin
e
Origin = 2017 truck with 15%
improvement over 2010
U.S. Regulatory environment
Expect to fill with Advanced
Powertrain, Advanced Engine
36© 2016 Eaton. All Rights Reserved..
Advanced powertrain
Mechanical Systems Controls
• Parasitic losses
• Gear friction
• Oil churn
• Dual clutch
• Customized ratios to match engine sweet spot
• Down-speeding
• Narrow-banding
• Power-shifting & hybridization
• Intelligent shift points• GPS-based
• Engine transient matching
37© 2016 Eaton. All Rights Reserved..
Advanced powertrains to meet specific customer needs
• Utilizing tailored integration to enhance fuel economy
• Optimizing fuel map efficiency with customized ratios and shift points
• Leveraging transmission overall ratio to enable down-speeding without sacrificing performance
Powertrain optimization Tailored solutions
• 6 platforms
• >30 models
The right tool for the job
38© 2016 Eaton. All Rights Reserved..
Impact of “ICA”Intelligent, Connected, & Autonomous
*SWEC = Software, Electronics, & Controls
OEMs’ focus
for differentiation
Significant resource
implications
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Frost and Sullivan Workshops
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stakeholders
Over 350 global senior executives from all spectrums of the industry
expected to attend
1st day at the House of Lords/Common chaired by Member
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For Additional Information
Kayla Belcher
Corporate Communications
210.247.2450
Sandeep Kar
Global Vice President-Research
Mobility
+1 (416) 4907796
Bharani Lakshminarasimhan
Program Manager
Commercial Vehicle, Mobility
+91 44 6681 4459
Cyril Cromier
Vice President Sales
Intelligent Mobility
+33 1 42 81 22 44