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New Mega Trends in the United States

Impact of Mega Trends on the Future of Mobility

NCDD-18

September 2013

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Contents

Section Slide Numbers

Executive Summary 4

Research Scope, Objectives, Background, and Methodology 12

Definitions Used in the Study 18

Mega Trend 1: Urbanization - 'City as a Customer' 20

Mega Trend 2: Smart is the New Green 30

Mega Trend 3: Social Trends 35

Mega Trend 4: Connectivity & Convergence 44

Mega Trend 5: Bricks and Clicks 51

Mega Trend 6: Innovating to Zero 61

Mega Trend 7: New Business Models: Value for Many 64

Mega Trend 8: Economic Trends 69

Mega Trend 9: Health, Wellness and Wellbeing 73

Mega Trend 10: Future Of Mobility 78

Conclusion 92

Appendix 96

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Executive Summary

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New Mega Trends—North America: Top Mega Trends Covered in

Frost & Sullivan Research

What is a Mega Trend?

Mega Trends are transformative, global

forces that define the future world with their

far reaching impacts on businesses,

societies, economies, cultures, and

personal lives.

Why do Mega Trends matter?

• Mega Trends have diverse meanings and impacts for different industries, companies, and individuals. An analysis of these Mega Trends and their implications forms an important component of a company’s future strategy, development, and innovation process, and impacts product and technology planning.

• The following research service sets the stage for visionary thinking by identifying the most important global Mega Trends that will significantly impact urban logistics and the implications of these Mega Trends for transforming society, markets, and cultures.

Global Mega Trends

Urbanization

—City as a

Customer

Social

Trends Innovating to

Zero

New Business

Models

Health,

Wellness, and

Well Being

Future of

Mobility

Economic

Trends

Connectivity

and

Convergence

Bricks and

Clicks

Smart is the New

Green

Source: Frost & Sullivan

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Executive Summary—Key Findings

Source: Frost & Sullivan

1

4

3

5

2

Approximately 85% of the total population in the United States will live in urban regions by 2025,

and US cities will expand to form Mega Regions and Mega Corridors. North America could see 3

Mega Cities, 11 Mega Region, and 7 Smart Cities by 2025.

In 2020, people above the age of 65 will account for nearly one-fifth of the population. Currently,

more than 60% of new car purchases are made by people over 50 years of age.

Increased connectivity among vehicles and road infrastructure will improve road safety, traffic

congestion and reduce emissions. It paves the way for adoption of autonomous driving

technologies. In the US market, vehicle-to vehicle (V2V) technology will see commercialization and

increased market acceptance between 2015 and 2020 while infrastructure for the vehicle-to

infrastructure (V2I) technology will become popular between 2020 and 2025.

The demand for seamless navigation, telematics, and entertainment drives the growth of

connectivity in cars. By 2020, 90% of new cars will have some form of in-vehicle connectivity.

By 2025, 20% of global retailing will happen through online channels. It is expected that by 2015,

more than 50% of global new car sales will be influenced by the Web, through online promotions,

online research, the virtual showroom experience, and online purchasing.

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Vancouver

San

Francisco

Seattle

Los

Angeles

Calgary Toronto

New York

Chicago

Urbanization—North America to See 8 SMART Cities by 2025 Most of pilot projects, innovation, and leadership in the Smart Cities space are taking place in North America.

Source: Frost & Sullivan

North America will lead the world in new smart

energy capacity in the next 3 years. The United

States will lead the smart grid market in the next 3

years with a compound annual growth rate

(CAGR) of 30%–35%.

The smart technology market in North America

will grow by 40% by 2015. Nearly 35 smart

technology projects are underway in North

America.

The smart building market opportunity is

expected to peak in 2020. North America

accounted for 29% of the smart building market

in 2011 and is estimated to account for 30%–

35% in next few years.

The United States is expected to lead in the

smart transport market in North America. It plans

to be the world's largest real-world test of smart-

vehicles.

Smart Cities, North America, 2025

Smart City

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Outside the vehicle

sensors, V2V, V2I,

V2H, D2D, ADAS,

crowd sourcing, cloud

interaction

Personal media such

as iPod, iPhone, iPad

bridging digital life

style gaps in the car

Device connectivity

both for content and

data pipe (tethered

connectivity model)

Partnerships with

Toyota, Ford and now

Nissan for cloud

usage

Within the vehicle:

multimodal HMI*—

concerned with

presentation of

information to user

Eco-driving aids

eco driving analysis

and information

presentation to

driver

*HMI Human Machine Interface

Note: Images are only for illustration. Source: Frost & Sullivan

Smart is the New Green—Smart Car The Smart Cloud is critical among the six key pillars of the smart car definition.

Pillars of Smart Car Definition, US, 2012

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Social Mega Trends—New Car Registrations by Age Group Baby boomers will continue to drive automotive demand in the United States.

39% 37%

24%

40%

36%

24%

48%

33%

20%

62%

24%

13%

0%

10%

20%

30%

40%

50%

60%

70%

50 and older 35-49 18-34

2001 2002 2007 2012

New Car Registrations by Age Group, US, 2001, 2002, 2007, and 2012

Note: Because of rounding the percentages may not add up to 100. Source: J.D Powers; Frost & Sullivan

Boomers account

for 62% of the

vehicles sold in the

US in 2012

compared to 39% in

2001.

Buyers aged

between 18 and 34

are currently only

13% of the new-car

market, down from

24% in 2001.

Pe

rce

nta

ge o

f N

ew

Car

Reg

istr

ati

on

s

Age Group

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Bricks and Clicks—Current Digital Car Retailing Trends in North

America

Digital Within Existing Model

Unlike Europe, North American OEMs and dealers are

pursuing digitization models through existing stores.

Significant investments are being made in updating the

store technology, training the staff, and digitally integrating

various aspects of the car retailing process

Greater focus on off-store digitization

While some investment is being made in in-store tools

such as tablets and kiosks, the key focus remains on the

utilization and recalibration of off-store digital media such as

websites, apps, and social media

Lead Generation Key Digitization Objective

Dealers are not using online and mobile platforms to sell

vehicles. Rather, these media serve as the first touch point with the consumer. The key objective continues to be to attract the consumer to the

dealership

Source: Frost & Sullivan

The evolutionary approach to technology in digital retailing dominates in North America.

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For More Information:

Jeannette Garcia

Corporate Communications

Automotive & Transportation

(210) 477-8427

jeannette.garcia@frost.com