COVID-19 Automotive demand post COVID-19 - Boston Consulting Group
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
COVID-19 Automotive demand post COVID-19
Anticipate a prolonged Fight phase of 12-24 months
Scenarios and outcome driven by five key questions; shape varies based on regional assumptions
Illustrative
Flatten Fight Future
Shut down Restart Cure
Economic
activity 1a 2a
100% 3
2b Potential Pathways
1b
Critical care
patients
Five questions What will be the LENGTH of What will be the LENGTH of Where does the
1a 2a 3
will shape “Flatten”? “Fight”? economy return
the economic to relative to the
outcomes To what DEPTH does the What LEVEL of recovery does the pre-COVID era in
1b economy drop in “Flatten”? 2b economy achieve in “Fight”? “Future”?
Source: BCG AUTOMOTIVE DEMAND POST COVID-19
As of 15 May 2020
Fight: Auto sales in China on recovery path
Flatten Fight Future
2b | LEVEL of recovery
Vehicle sales Vehicle sales Vehicle sales
China1 Europe2 US3
-20% -46% -46%
-39%
+8%
-3%
-52%
~-80% 0%
-82% -7% -7%
Jan Feb Mar Apr Jan Feb Mar Apr Jan Feb Mar Apr
2019 2020
1. Passenger vehicles sales by month including Mini Vans; 2. New passenger car registrations by month, Europe = EU26 + UK + Iceland, Norway, Switzerland
2. 2020 estimate based on BCG analysis; 3. Light Vehicles (LV) include Passenger Vehicles (PV)
Sources: Marklines/China Association of Automobile Manufacturers (CAAM), ACEA actuals, Wards Automotive, BCG analysis and forecast AUTOMOTIVE DEMAND POST COVID-19
As of 15 May 2020
Economic forecasts deteriorating globally for 2020 while
remaining stable for 2021
Flatten Fight Future
2b | LEVEL of recovery
GDP growth forecast (YoY in %) GDP level forecast 2
2020 2021 EOY 2021 vs.
-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% EOY 2019
China 1
1.2% 6.0% 5.8% 9.2%
107–112%
Europe2 -7.5% 1.3% 1.4% 4.7%
95–101%
US3 -5.9% Forecast 2.0% Baseline 1.7% 4.7%
97–100%
Forecast range
Forecast (IMF Apr 2020) Baseline (IMF Jan 2020) Forecast range (IMF & Banks3)
Note: As of reports dated 31 March 2020 to 05 May 2020, YoY forecasts 1. Announced by the German Federal Ministry for Economic Affairs and Energy on 29 Apr 2020
2. Range calculated with 25th & 75th percentile values of forecast range 3. Range from forecasts (where available) of International Monetary Fond, JP Morgan Chase; Morgan Stanley;
Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC Source: German Federal Ministry for Economic Affairs and Energy; Bloomberg; IMF; BCG analysis AUTOMOTIVE DEMAND POST COVID-19
As of 15 May 2020
Change in mobility behavior expected –
intentions stronger in China
Flatten Fight Future
3 | Return of economy in the FUTURE
Risk associated with mode of Mode of transport Change of likelihood to buy/
transport after lockdown usage after lockdown own car after COVID-19
Very Much more Much more
low risk frequent likely
-50%
>60% -60%
Very A lot less Much less
high risk frequent likely
Public transit Private car Public transit Private car Buying a car Owning a car
People see car as the safest Private car will be more preferred after Clear picture in China on trend towards
mode of transportation lockdown – especially in China buying/owning car while EU/USA are mixed
Source: BCG; Urban mobility study surveyed 5,000 people in large cities around the world AUTOMOTIVE DEMAND POST COVID-19
Four scenarios of the crisis are simulated along Flatten-Fight-Future
1 Optimistic 2 Most likely I 3 Most likely II 4 Pessimistic
GDP level
ARCHETYPE
V-shape V skewed to a U U-shape W-shape skewed to an L
MACROECONOMIC
Positive surprise in virus properties Virus properties stay or worsen Virus properties linger with Occurrence of 2nd wave with severe global impact
continued fear of mutation
Rapid catch-up in mitigation measures Mitigation efforts are slow / unsuccessful Repeated shocks on regional/local
and their effectiveness and have to be extended Mitigation efforts are intense, yet ultimately level lead to frequent lockdowns
unsuccessful
Significant monetary and fiscal response Household & business confidence falls Severe depression of household
& remains depressed (08/09 crisis) Heightened incidents as economies reopen & business confidence
Household and business spending
necessitate new shutdowns
stays largely in tact Rebound through governmental Severe implications on labor, capital and
support in investments, business Household & business confidence remains productivity of the economy
Few businesses fail, unemployment
sector and households depressed
recovers from initial dip Economy increasingly embraces remote working
Financial system begins to show cracks
AUTO
Government backed incentives and cheap Confidence slowly increasing, supported by New vehicle sales remain depressed as market Auto supply chains severely disrupted
credit spur quick recovery government incentives moves into prolonged economic downturn
Continued shutdowns e.g., plants, dealers
Deferred automotive demand recovered Demand partly recovered, yet significant Significant portion of sales lost
Lingering change to consumer mobility
portion of sales lost in ‘20
patterns; Immense loss of sales
UNLIKELY COVID-19 CRISIS MOST LIKELY UNLIKELY
Source: BCG analysis
IN RANGE OF THESE SCENARIOS AUTOMOTIVE DEMAND POST COVID-19
As of 19 May 2020
Automotive Demand: Also in mid-term significant global impact
Sales forecast for CN, EU, US
(vehicle units in M)
Most likely scenario
-14% -6% -1% +4% +7% +9% -12% -3% +1% +7% +10% +12%
Most likely I Optimistic
68.4 70.2
scenario 62.5 61.8
65.0 66.8
scenario 62.5 63.1
66.6 68.6
59.0 60.7
53.4 55.2
27.4 28.4 29.4 28.0 29.1 30.1
24.8 25.7 24.8 26.2
24.8 25.4
22.8 23.4
20.5 19.8 21.0 21.4 21.8 20.5 19.8 20.3 21.4 22.0 22.5
16.8 19.2 17.5
17.1 13.8 15.0 16.2 16.7 17.1 17.1 17.1 14.2 15.4 16.6 17.1 17.5 17.6
2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025
-22% -7% -4% 0% +3% +5% -28% -15% -13% -11% -8% -6%
Most likely II Pessimistic
65.6 62.5
scenario 62.5
58.0 59.9
62.2 64.1
scenario 55.9 57.5 58.9
53.2 54.0
49.0 24.8
24.8 26.5 27.6 28.5 45.1
25.4
24.2 25.0 21.9 22.4 23.7 24.6
22.1 20.9
20.5 20.0 20.5 21.0 20.5
18.9 19.5 17.4 17.7 18.0 18.4 18.8
14.8 13.5
17.1 12.2 15.0 16.2 15.7 16.1 16.1 17.1 13.8 14.0 14.2 14.5 14.6
10.7
2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025
China Europe USA
Source: BCG Automotive Demand Model; IHS; BCG Analysis AUTOMOTIVE DEMAND POST COVID-19Next step: Please feel free to reach out regarding our tools/insights
1 Response
toolbox 2 Digital
offering 3 Our latest
thinking
Comprehensive approach to Mid-long-term: Demand scenarios Overarching and functional deep-
managing COVID-19 response and P&L / cash flow wargaming dive material on demand
Handle immediate response Short-term: Monitor and analyze Regular publications on crisis,
and leverage crisis in long-term indicators for decision support necessary actions & impact on auto
Source: BCG AUTOMOTIVE DEMAND POST COVID-19COVID-19 Disclaimer
The situation surrounding COVID-19 is dynamic and rapidly evolving, on a daily basis.
Although we have taken great care prior to producing this presentation, it represents
BCG’s view at a particular point in time. This presentation is not intended to: (i)
constitute medical or safety advice, nor be a substitute for the same; nor (ii) be seen
as a formal endorsement or recommendation of a particular response. As such you
are advised to make your own assessment as to the appropriate course of action to
take, using this presentation as guidance. Please carefully consider local laws and
guidance in your area, particularly the most recent advice issued by your local (and
national) health authorities, before making any decision.
AUTOMOTIVE DEMAND POST COVID-19Disclaimer
The services and materials provided by Boston Consulting Group (BCG) are subject to BCG’s Standard Terms (a copy of which is available upon
request) or such other agreement as may have been previously executed by BCG. BCG does not provide legal, accounting, or tax advice. The Client
is responsible for obtaining independent advice concerning these matters. This advice may affect the guidance given by BCG. Further, BCG has
made no undertaking to update these materials after the date hereof, notwithstanding that such information may become outdated or inaccurate.
The materials contained in this presentation are designed for the sole use by the board of directors or senior management of the Client and solely
for the limited purposes described in the presentation. The materials shall not be copied or given to any person or entity other than the Client
(“Third Party”) without the prior written consent of BCG. These materials serve only as the focus for discussion; they are incomplete without the
accompanying oral commentary and may not be relied on as a stand-alone document. Further, Third Parties may not, and it is unreasonable
for any Third Party to, rely on these materials for any purpose whatsoever. To the fullest extent permitted by law (and except to the extent
otherwise agreed in a signed writing by BCG), BCG shall have no liability whatsoever to any Third Party, and any Third Party hereby waives any
rights and claims it may have at any time against BCG with regard to the services, this presentation, or other materials, including the accuracy or
completeness thereof. Receipt and review of this document shall be deemed agreement with and consideration for the foregoing.
BCG does not provide fairness opinions or valuations of market transactions, and these materials should not be relied on or construed as such.
Further, the financial evaluations, projected market and financial information, and conclusions contained in these materials are based upon
standard valuation methodologies, are not definitive forecasts, and are not guaranteed by BCG. BCG has used public and/or confidential data and
assumptions provided to BCG by the Client. BCG has not independently verified the data and assumptions used in these analyses. Changes in the
underlying data or operating assumptions will clearly impact the analyses and conclusions.
AUTOMOTIVE DEMAND POST COVID-19You can also read
