Global Truck Study –
Perspectives towards 2030
Press Workshop VDA
June 26, 2014
A.T. Kearney & VDA Team
Global truck industry is on the cusp of major change
Overview “Global Truck Study”
low
Degree of change
high
1. Market
2. Technology
3. Business
model
4. Profitability
5. Industry
structure
Source: A.T. Kearney
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Market will grow by nearly 5% per year by 2020
Market
Global HD+MD truck sales
('000 units)
North America
Western Europe
East/
Central Europe
3.8%
5.3%
7.7%
545
421
184
Global1
4.8%
237
2013
230
5.5%
56
243
4.1%
3.5% 302
1,329
937
4.6%
2013
2013
2020e
10.0%
177
1,703
210 8.7%
98
2013
2020e
MD
HD
1. See China and India chapter for our perspective
Source: IHS Automotive, LMC Automotive, A.T. Kearney
x
x
408
289
5.1%
233
759
72
38
34
2013
2020e
ASEAN
4.7%
967
133
93
41
2013
85
1.9% 44
2.8% 41
2020e
2013
184
4.4% 125
5.5% 59
2020e
112 11.0%
2013
2013
1,375
3.5%
3.0%
2.3%
4.0%
1,047
India1
Japan
China1
2020e
410
151 2.9% 185
2,328
254
175 4.6%
South America
310
252
125
100 3.1%
5.1%
299
77
178 15.8%
38
222
139 7.6%
See Africa
chapter for
details
2020e
3,657
2,640
330
76
2020e
2020e
x
CAGR
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Two worlds of innovation driven by TCO structures expected
Technology
Average TCO in Triad and Emerging countries
MD
HD
(rigid distribution vehicle)
(long-haul truck tractor)
Triad
example:
Germany
Total TCO in € p.a.: 52k
Total TCO in € p.a.: 70k
39%
50%
10%
2%
6%
5%
2% 13%
Emerging
example:
China
11%
23%
12%
Driver
Depreciation
Source: A.T. Kearney
12%
5% 2%
Total TCO in € p.a.: 22k
52%
31%
43% 39%
42%
9%
4%
Repair and Maintenance - tire
Repair and Maintenance - non-tire
Total TCO in € p.a.: 47k
6%
3%
9%
71%
Fuel
= TCO p.a.
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Existing broad range of business models is expected to converge
Business
model
Perspective on future business models
Future business model: “Smart global”
Currently existing business elements
Business model elements
Regional set-up
Scale
Internal production valueadded
Product-market positioning
Industry segment coverage
: parameter value not part of “smart global”
Source: A.T. Kearney analysis
Parameter
value
Local
International
Global
Low
Regional
Global
Regional & global
Low
Medium
High
Premium
Value
Pure truck
Other segments
Business model
elements
Parameter value
Regional set-up
Global
Scale
Regional & global; smart market selection
Internal production
value-added
Strictly focused on competitive advantages
Product-market
positioning
“Strong” core positioning, smartly adapted to
local requirements; multi brand strategy
Industry segment
coverage
Off-highway coverage
: parameter value part of “smart global”
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Profit pools of European OEMs are attractive
Profitability
2.7
14.4
1.3
1.9
2.4
0.3
3.3
1.7
0.4 0.3
0.3
0.6
3.0
2.13
3.9
0.8
4.0
-0.4
Europe
Sales
Revenues
Ashok Leyland2
Beiqi Foton
586
USA
186
213
72
Daimler -Trucks
Dongfeng Commercial Vehicles
505
19
Hino
Iveco
Kamaz - Trucks
MAN - Commercial Vehicles
India
Navistar2
Paccar2
69 29 1,588
8
Scania
Sinotruk2
Japan
China Russia
13
10
2 124
Tata Motors - Tata Brand3
Volvo - Trucks
1. Return on sales in % based on operating profit before tax
2. Return on sales in % based on net profit before tax 3. Including Tata light vehicles
Note: Daimler/Volvo excluding buses and financial services; MAN/Scania including buses and financial services
Source: Annual reports, A.T. Kearney analysis
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However, there are many ways to “profit heaven”
Profitability
Profitability1
14
“Rollercoaster”
“Profit heaven”
12
Scania
10
Paccar
Tata Motors Tata brand3
Higher
8
Sinotruk
6
Volvo - Trucks
Ashok Leyland
MAN - CV
Kamaz
Iveco
4
Dongfeng - CV
Daimler - Trucks
2
Navistar
Hino
Beiqi Foton
0
“Vicious cycle”
“Safe profit trap”
-2
Higher
1. 2003-2012 average value of return on sales (%RoS) 2. 2003-2012 statistical variance on return on sales (%RoS) 3. Tata brand including light vehicles
Note: Daimler/Volvo excluding buses and financial services; MAN/Scania including buses and financial services
Profit stability2
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Currently, this is reflected by heterogeneous market structures
Industry
structure
Market share of truck OEMs across top 10 markets 2013
(Sales volume in k units, market share in %)
1,047
421
22%
32%
252
230
21%
24%
6%
6%
27%
19%
27%
12%
9%
5%
17%
5
10
15
20
25
FAW
CNHTC (Sinotruk)
PACCAR
BAIC (Foton)
MD + HD trucks >6t GVW
Source: IHS Automotive, A.T. Kearney
11%
16%
7%
30
35
40
45
50
North America
TATA
WEICHAI POWER (Shaanxi)
TOYOTA (Hino)
FORD
55
60
28%
20%
14%
12%
11%
9%
China
DAIMLER
DONGFENG
VOLVO
VOLKSWAGEN
14%
65
South
America
NAVISTAR
ISUZU
CNH INDUSTRIAL (Iveco)
JAC
70
12%
57%
21%
10%
114 72 64 97
19%13% 22%
12%
15%
133
39%
16%
0
210
18%
17%
15%
12%
21% 10%
9%
31% 35%
15%
11%
7%
5%
10%
26% 31%25% 15%
7%
75
80
Western
India
Europe
ASHOK LEYLAND
KAMAZ
EICHER
SAIC
85
90
95
100
ASEAN
Japan
RoW
Russia Central/
Eastern
HYUNDAI
Europe
Others
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By 2030 we expect a more homogeneous picture
Industry
structure
Today
Future
Global Groups Regional Giants
Triad
• Daimler
• Volvo
• VW 1
• Paccar
Non-Triad
1. Including MAN and Scania
Source: IHS Automotive, A.T. Kearney
Niche
Players
• Toyota (Hino)
• Ford
• Navistar
• Isuzu
• CNH Industrial
(Iveco)
• Dongfeng
• FAW
• CNHTC (Sinotruk)
• BAIC (Foton)
• Tata
• Shaanxi
(Weichai P.)
• JAC
• Ashok Leyland
• Kamaz
• Eicher
• SAIC
• Hyundai
2030 Truck Industry Structure
• 6-8 Global Groups incl. 2-4 Chinese/Indian/Korean
players
• Top players with >400,000 units; >250,000 units
needed to be globally competitive
• Significantly reduced number of niche and
regional players; few new specialists for specific
product segments
• Triad still dominated by Triad OEMs, China and
India by local OEMs; heterogeneous OEM
landscape in all other countries
• Few remaining joint ventures
• All major players with significant off-highway
business
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