Autofacts EU Market Update & Mobility Outlook ECG Conference Brussels 20-10-2017
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Autofacts®
EU Market Update & Mobility Outlook
ECG Conference Brussels
20-10-2017
Strictly private
and confidential
October 2017
Growth of new car registrations is beginning to slack off in Q3 – worse to be expected in Q4
After a strong start in the first quarter, registrations started to mellow in Q2. Incoming results of Q3 suggest that growth stalled over the three months, due to almost 9% decline in the
UK and Ireland, and top-line weakness in the German market which is shaken severely by doubts about the viability of Diesel cars. Nevertheless, Italy, France and Spain continued on
their recovery path, topped only by Poland and the Netherlands.
EU+EFTA: New Car Registrations by Top 12 Markets
YTD-Sep 2016 vs YTD-Sep 2017 (millions)
3,0 30%
2,5 20%
2,0 10%
1,5 0%
1,0 -10%
0,5 -20%
0,0 -30%
Germany United Italy France Spain Belgium Poland Netherlands Sweden Austria Ireland Switzerland
Kingdom YTD-Sep 2016 YTD-Sep 2017 YOY Change (R-Axis)
Source: ACEA, Autofacts Analysis
PwC Autofacts ® 2
Economic sentiment is approaching a historical high while growth may soften
GDP growth forecasts are forecasted to slow down in 2018, especially UK, Spain and Germany. In the UK, net investment activity has plunged by more than 30% in 2017, leaving its
show an overall acceleration in the Euro Zone, while several main countries mark on the current year as well as short-and mid-term growth prospects. Italy and France, however, are
expected to accelerate further, in line with high economic sentiment.
EA & Top 5: Real GDP Annual Growth EA & Top 5: Economic Sentiment Indicator
2016 – 2018F (percentage change) Sep 2014 – Sep 2017 (101 = long run average)
120
United
Kingdom
Spain
110
Italy
100
Germany
France 90
Euro Area
80
- 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% 3,5% Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep
2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017
2016 2017F 2018F EA DE FR IT ES UK
Source: IHS Markit, European Commission (October 2017)
PwC Autofacts ® 3Europe’s new passenger car market shows an increasing slow-down since Q2 2017
On a rolling 12-month average base, it seems that the European market has hit is cyclical high in summer 2017, and is moving towards a reversal of dynamics as the year continues. This
seems contradictory to recently-updated macroeconomic growth statistics and expectations, but is explicable through increasing insecurity about regulatory changes with ensuing
impacts on residual value expectations and – therefore – cost of financing.
EU+EFTA: Rolling 12 Months Car Registrations EU+EFTA: New Car Registration Variance
Sep 2008 – Sep 2017 (millions) 1990 – 2017F (millions)
17 5
28-year high
(1990-2017)
16
4
2017F
15
2016
3 28-year low
14 (1990-2017)
13
2
12
1
11
10 0
Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Germany France United Italy Spain Poland Czech
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Kingdom Republic
Rolling 12-Month Car Registrations Annual Registrations
Source: ACEA, Autofacts Analysis
PwC Autofacts ® 4Strong growth can appear due to totally different reasons
The Fiat and Mercedes-Benz brands both achieved sales of approximately 500k units year-to-date, and managed to grow at over 7% - only Fiat did so without any new product launch,
while Mercedes’ home market of Germany showed increasing weakness. Fiat, however, was bolstered by increasing demand in its core markets Italy, France and Spain, while Mercedes
continued to churn out new and upgraded products against weaker competition.
EU Top 5 Markets: Brands Sales Volume and Growth Rate* EU Top 5 Markets: Market Share*
YTD Sep 2016 vs. YTD Sep 2017 (thousands) YTD Sep 2016 vs. YTD Sep 2017 (percentage share)
1.000
Volkswagen
10,6%
Volkswagen Renault
800 7,4%
Renault 11,2% Ford
Ford 35,0%
7,3% Opel-Vauxhall
34,1%
600 Opel-Vauxhall Mercedes-Benz 7,3%
Peugeot Mercedes-Benz
7,5%
2017 Sep- 2016 YTD- Peugeot
Audi Fiat
YTD YTD 6,9% 6,3%
400 BMW Fiat
4,0% 5,9%
Audi
Citroen 5,4% 6,0% 6,1%
200 4,0% 5,9% 5,8% BMW
5,3% 6,1%
Citroen
5,8% 6,1%
Other
0
(8%) (6%) (4%) (2%) 0% 2% 4% 6% 8%
Source: ACEA, Autofacts Analysis *Only brands with official sales data included, commercial vehicles not included
PwC Autofacts ® 5Due to incoming actuals, Autofacts has adjusted to full-year forecast for EU to just 2.4% growth
The cyclical slowdown is now expected to continue into 2019 due to adjustments of the fuel and powertrain mix and technical compliance increasing vehicle prices. With weakening
residual values, financing costs for new vehicles will increase even in the absence of a central bank rate hike, pushing some incremental demand back into the used-car market. The
development in the United Kingdom remains a wild-card requiring close monitoring and quick reactions.
EU+EFTA: New Light Vehicle Registrations
2009 – 2023F (millions)
20 10%
18
16 6%
14
12 2%
10
8 (2%)
6
4 (6%)
2
- (10%)
2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F 2023F
Car Registrations LCV Registratons YOY Change (R-Axis)
Source: ACEA, Autofacts Analysis
PwC Autofacts ® 6New products and continuous investments in plants are expected to keep utilization above 80%
The European light vehicle assembly is expected to remain strong as domestic and non-domestic OEMs launch new products and invest in plant upgrades and expansions, which could
push volumes to over 20m units by 2020. In 2016, European light vehicle assembly grew by 3.4% to 18.7m units and is assumed to grow more than 250k units to 19.0m units in 2017,
keeping overall plant utilization at a sustainable level of more than 80% in 2017 and for the foreseeable future.
EU: Light Vehicle Assembly
2009 – 2023F (millions)
25 100%
3,4 3,6 3,6 3,6
3,5 3,9
3,7 3,5
20 3,6 80%
4,7 4,1 5,4 4,5
4,7
5,8
15 60%
10 19,6 20,4 20,5 20,5 20,4 40%
18,7 19,0 19,4
18,1
16,2 16,9 16,0 16,1 16,8
14,7
5 20%
- 0%
2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F 2022F 2023F
Assembly Volume Excess Capacity Utilisation (R-Axis)
Source: Autofacts 2017 Q4 Forecast Release
PwC Autofacts ® 7The enlarged PSA Group still has a long way to realize possible synergies
With expected 3.1 million units production in 2017 and strong growth outlook due to the expansion of the SUV/ Crossover product portfolio, the PSA group is one of the most active
market movers in Europe. Still, as product portfolio and operations are not yet aligned, the economics of the take-over remain challenging. Both Daimler and BMW are expected to
increase their product portfolio and output over the next 5 years, while overseas manufacturers seem locked into their current European footprint.
EU: Top 10 Alliance Groups
2016 vs 2023F (millions)
6 5%
5,4
5,1
5 4%
4 3%
3,5
3,1
3 2%
2,3 2,3
1,9
2 1,8 1,8 1%
1,5 1,5
1,2 1,1 1,2
1 0,7 0,7 0%
0,6 0,5 0,5 0,4
0 -1%
VW PSA* RNM** Daimler BMW FCA Ford Hyundai Tata Toyota
2016 2023F CAGR (R-Axis)
Source: Autofacts 2017 Q4 Forecast Release *PSA incl. GM Europe (Opel-Vauxhall) **Renault-Nissan-Mitsubishi
PwC Autofacts ® 8The mix of powertrains installed in the EU is going to align further to global standards
In order to meet emission requirements, downsizing and electrified vehicles are expected to gain market share in the near future. Since performance is still a valid consumer need,
Autofacts expects manufacturers and technology partners to focus further on turbocharged engines. Further, by 2023 almost 20% of all vehicles, compared to 3.2% in 2016, are
forecasted to have an electrified powertrain – increasing growth of the hybrid figure depends on further decline of Diesel engines.
Average Engine Displacement Technology Outlook Vehicle Propulsion
2016 – 2023F (cubic centimeters) 2016 vs 2023F (percentage share) 2016 vs 2023F (percentage share)
1.800 100%
1,3%
74,7% 74,4%
75%
1.700
50% 48,8%
2016
1.600 47,9%
25% 16,4%
8,0% 9,6% 10,9%
1.500 0%
2016 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2016 2023F
Single Turbo Twin-Turbo Naturally Aspirated
5,2%
5,8%
Engine Share by Cylinder Number Trans. Share by Gear Count
2016 – 2023F (percentage share) 2016 – 2023F (percentage share) 8,7%
100% 100%
75% 75% 46,0%
50% 50% 2023F
25% 25%
0% 0% 34,4%
2016 2017F 2018F 2019F 2020F 2021F 2022F 2016 2017F 2018F 2019F 2020F 2021F 2022F 2023F
I2 I3 I4 I5 I6/H6/V6 V8 Other 4 5 6 7 8 9 10 Electric CVT Diesel Hybrid* PHEV
Source: Autofacts 2017 Q4 Forecast Release *Includes mild & full hybrids
Electric Fuel Cell Gasoline
PwC Autofacts ® 9Alternative drivetrains will become the most important growth area in upcoming years
The installation of alternative drivetrains in light vehicles that are manufactures in the EU is forecasted to grow substantially in numbers by more than 510% or 3.4m units, summing up
to more than 4.0m units by 2023. Fully electric and hybrid powertrains are regarded as necessary to achieve the European CO2 emission targets by lowering fuel consumption –
especially as declining Diesel sales make the challenge even more daunting. Regulations beyond 2021 are still under discussion.
EU Powertrain: Alternative Engine Type Distribution EU Powertrain: Hybrid Distribution**
2016 vs. 2023F (thousands) 2016 vs. 2023F (thousands)
5.000 5.000
4.023
891
4.000 4.000
2.968
973 2.083
3.000 3.000
1.448
2.000 2.000
443
1.000 1.000
606 106
442
- -
2016 Increase Increase Increase Increase 2023F 2016 Increase Increase 2023F
Full Hybrid Mild Hybrid Plug-In Hybrid BEV/FCV* Diesel Gasoline
Hybrid Hybrid
Source: Autofacts 2017 Q4 Forecast Release *BEV = Battery Electric Vehicle, FCV = Fuel Cell Vehicle **excl. BEV/FCV
PwC Autofacts ® 10“It’s gonna be so eascy”
shared
autonomous connected
s
a c
electrified e y yearly
updated
PwC Autofacts ® 11The user will be able to choose from a menu of mobility forms
grouped between the coordinates vehicle driver vs. vehicle owner
The four form of mobility of the future
Machine
Autonomous Autonomous
The primary use-case private-vehicle shared-vehicle Autonomous vehicles will
is car sharing in urban have a positive impact on
areas. Driver sharing-concepts.
An increasing amount of Autonomous and shared
young people living in mobility will expand the scope
cities do not own a car of application for electric
and use the car sharing vehicles.
concept in combination
with public transport. Personally-driven Personally-driven
private-vehicle shared-vehicle
Man
Private Vehicle Owner Shared
Source: PwC eascy-Study
PwC Autofacts ® 13The basis for modelling the results is the forecast of the person-
kilometres and the pooling factor
Pooling Annual Turnover Positive
factor mileage rate effects
Usage of Passenger- vehicle- New
vehicle- Electrification
Mobility kilometres kilometres registrations
Stock
Distribution of Result of the Result of the Amount of Amount of new Electric
the personas transported amount of vehicles that registered vehicles share
to passengers vehicles and have been in vehicles that of the total
the new and their their average stock on a are allowed to number of
mobility forms driven distance mileage certain day participate in new-registered
in motorized the public vehicles
traffic traffic
Source: PwC eascy-Study
PwC Autofacts ® 16Despite current scepticism, it is estimated that 40% of all vehicle
kilometres will be driven autonomously or shared in 2030
Germany: Distribution of mobility forms Germany: Vehicle kilometres
2017-2030 (in percent) 2017-2030 (in billion kilometres)
100% 900
90% 800
80%
700
70%
600
60%
500
50%
400
40%
300
30%
200
20%
10% 100
0% 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Personally-driven Personally-driven Autonomous Autonomous
Source: PwC eascy-Study private-vehicle shared-vehicle private-vehicle shared-vehicle
PwC Autofacts ® 18In Germany, vehicle stocks could drop by 20% by 2030 - but new
registrations would rise by almost 20 percent in total
Germany: Stock by mobility forms Germany: Registrations by mobility forms
2017-2030 (in million) 2017-2030 (in thousand)
50 6.000
45
5.000
40
35
4.000
30
25 3.000
20
2.000
15
10
1.000
5
0 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Personally-driven Personally-driven Autonomous Autonomous
Source: PwC eascy-Study private-vehicle shared-vehicle private-vehicle shared-vehicle
PwC Autofacts ® 19In Germany, hybrid drives will play an important role in the
short-term - until 2025 electric vehicles are gaining importance
Germany: Registrations by drive types Germany: Stock of drive types
2017-2030 (in percent) 2017-2030 (in million)
100% 50
90% 45
80% 40
70% 35
60% 30
50% 25
40% 20
30% 15
20% 10
10% 5
0% 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Combustion Hybrid Electric Combustion Hybrid Electric
Combustion Hybrid Electric
Source: PwC eascy-Study
PwC Autofacts ® 20In 2030, the transition to electrified and (partially) autonomous
vehicles will be in full swing – starting with new registrations
Europe: Vehicle stock Europe: Drive types distribution on new registrations
2017-2030 (in million) 2017-2030 (in million)
350 25
300
20
250
15
200
150
10
100
5
50
0 0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Personally-driven Personally-driven Autonomous Autonomous
Combustion Hybrid Electric
private-vehicle shared-vehicle private-vehicle shared-vehicle
Source: PwC eascy-Study
PwC Autofacts ® 21Contact
Christoph Stürmer
Global Lead Analyst
PwC Germany (Europe)
T: +49 69 9585 6269
E: christoph.stuermer@de.pwc.com
PwC Autofacts ® 22Autofacts – Dedicated to the Automotive Industry
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Autofacts ®
The information contained in this report represents the culmination of proprietary research conducted by Autofacts, an analytical group within PwC. All material contained in this report was developed independently of any
PwC client relationship and does not represent the firm’s view as an auditor to any legal business entity. While every effort has been made to ensure the quality of information provided, no representation or warranty of any
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©2016 PwC. All rights reserved. “PwC” refers to PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Ltd., each of
which is a separate and independent legal entity. “Autofacts” is a globally registered trademark of PwC.
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