arial 44 – one word · 2020-04-30 · © 2020 lmc automotive limited, all rights reserved. impact...
TRANSCRIPT
© 2020 LMC Automotive Limited, All Rights Reserved.
Impact
Jeff Schuster, LMC Automotive
30 April 2020
Automotive Outlook - Path to Recovery
© 2020 LMC Automotive Limited, All Rights Reserved.
Outline
2
Recent sales results, implications and scenarios
Production impact
© 2020 LMC Automotive Limited, All Rights Reserved.
Latest Light Vehicle market data (selling rates) …
3Source: LMC Automotive
-
5
10
15
20
25
30M
illio
ns
China
Feb-20:
-80% yoy
Mar-20
-46%
-
5
10
15
20
25
Millio
ns
Western Europe
Feb-20:
-7% yoy
Mar-20:
-51%
0.0
0.5
1.0
1.5
2.0
2.5
Millio
ns
Korea
Feb-20:
-18% yoy
Mar-20:
+10%
02468
101214161820
Millio
ns
USA
Feb-20:
+8% yoy
Mar-20:
-39%
© 2020 LMC Automotive Limited, All Rights Reserved.
Global Light Vehicle sales – off a cliff
Source: LMC Automotive 4
40
50
60
70
80
90
100
110
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Millions
© 2020 LMC Automotive Limited, All Rights Reserved.
Outlook scenarios for 20-21: V, U or L
5Source: LMC Automotive
Q1/Q2 lockdown is the longest and most extreme. Social distancing and other measures remain during relaxation, but do not present large economic costs.
OEMs develop novel sales approaches combining online activity with respect for new norms in social contact, and sales and production rebound.
Global selling rate dips further in April but begins steady recovery, averaging >80 mn units/year in Q3.
V
Q1/Q2 is still the most extreme lockdown, but subsequent social controls continue to take a toll on vehicle sales and economic activity.
Economic scarring and heavy blows to confidence undermine recovery in underlying demand conditions.
Global selling rate averages <60 mn units/year for H2. 2021 starts to see larger improvement, from very low 2020 base.
U
Q1/Q2 is still the most extreme lockdown, but subsequent social controls continue to take a toll on vehicle sales and economic activity.
Economic slowdown is severe and lasting. The macroeconomic recovery that comes in H2 is far too weak to undo damage. There is a permanent and significant loss of output.
Global selling rate slightly below U in 2020, but recovery in 2021 is weak, with sales rising only by single-digit millions.
L
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Outlook scenarios for 20-21: V, U or L
6Source: LMC Automotive
95 9490
70
8275
85
60
79
57
66
40
50
60
70
80
90
100
2017 2018 2019 2020 2021
LMC V U L
Global Light Vehicle Sales (millions)
© 2020 LMC Automotive Limited, All Rights Reserved.
Composition of decline from 2019 to 2020
7Source: LMC Automotive
Global Light Vehicle Sales (millions)
© 2020 LMC Automotive Limited, All Rights Reserved.
US sales pattern as of end of March 2020
5
7
9
11
13
15
17
19
Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
US Light Vehicle SAAR
Pre-COVID-19 Projected SAAR
Source: LMC Automotive
© 2020 LMC Automotive Limited, All Rights Reserved.
Current US sales pattern
5
7
9
11
13
15
17
19
Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
US Light Vehicle SAAR
Pre-COVID-19 Projected SAAR
Source: LMC Automotive
© 2020 LMC Automotive Limited, All Rights Reserved.
US Sales show significant risk ahead
13.2
10.411.6
12.8
14.515.6
16.417.4 17.5 17.2 17.2 17.0
12.2
13.914.7
8
9
10
11
12
13
14
15
16
17
18
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Mill
ions
US LV Sales Volume Risk
10
12.9
15.1
16.2
Source: LMC Automotive
© 2020 LMC Automotive Limited, All Rights Reserved.
Outline
11
Questions
Recent sales results, implications and scenarios
Production impact
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88.9
71.0
82.6
2019 2020 2021
Production expected down 20% and dependent on complex assembly restart.
Risks expected to follow levels and patterns of demand.
Pre-COVID-19 levels not expected until 2023 or 2024.
Latest global production baseline estimate
-20.1%
12
+16.3%
Source: LMC Automotive
© 2020 LMC Automotive Limited, All Rights Reserved.
April expected to be off 65% and the low point of the year.
Projected pattern shows levels not turning positive until December – typically low levels in 3Q could be stronger if restart plan holds.
2020 global light vehicle production trend by month
13
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
0
2
4
6
8
10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mill
ions
2019 2020 % change
Mill
ions
Source: LMC Automotive
© 2020 LMC Automotive Limited, All Rights Reserved.
North American production recovery path
16.9 16.3 12.2 14.2 15.8 16.7
40%
45%
50%
55%
60%
65%
70%
75%
80%
85%
0
2
4
6
8
10
12
14
16
18
20
2018 2019 2020 2021 2022 2023
Production Risk Utilization
14
Mill
ions
Base case volume down 21%,
with utilization below 60% in
2020 returning to 70% by 2023.
Idle capacity is expected to be
nearly 8mn in short-term,
illustrating pressure on cost
structure and higher cash burn
across the industry.
With the restart beginning to
take shape, risk remains high,
but inventory is low.
Source: LMC Automotive
LV Production
12.8
16.517.2
15.0
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Reminder of supply chain complexity
Tier 3 / Raw Materials
Tier 2 component
suppliers
Tier 1 and module sub-
assembly
OEM parts plants
OEM Logistics to
sales channel
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China went through destocking in 2019 and was expected to see increased levels in 2020 – similar to North America and Europe.
All assembly plants in China have restarted after being down for an average of 16 days (varied between 7-41 days) – slow ramp-up with some plants running single shifts.
Is China a model for restart in NA and Europe?
16
-90%
-70%
-50%
-30%
-10%
10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Monthly Production % change from 2019
Source: LMC Automotive
© 2020 LMC Automotive Limited, All Rights Reserved.
Europe – Some distortion to year-on-year comparison but follows similar pattern with restart slated for May.
North America – Mercedes was first! May restart for most others (some in early May and D3 moved to Mid-May). Expect slow ramp up with single shift operations at first.
Asia – India down until May; S. Korea and Japan slow due to exports
A view of Europe and NA plant restart
17
-110%
-90%
-70%
-50%
-30%
-10%
10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Europe Monthly Production % change from 2019
Source: LMC Automotive
-110%
-90%
-70%
-50%
-30%
-10%
10%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
N. America Monthly Production % change from 2019
© 2020 LMC Automotive Limited, All Rights Reserved.
Inventory metrics
18Source: LMC Automotive
74 7261
8778
697367
57
76 69
95
3.30
3.40
3.50
3.60
3.70
3.80
0
20
40
60
80
100
Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20
Mil
lio
ns
US Light Vehicle Days' Supply
Yr-Ago Days' Supply Days' Supply Inventory
The pullback in demand has caused a similar spike in days’ supply in March, even as
inventory levels fall.
A significant cut in production, as plant are shutdown, will pull down days supply
levels back to the 60-70-day level by next month.
60 65 5972
100
4.00
4.20
4.40
4.60
4.80
5.00
0
20
40
60
80
100
120
1Q19 2Q19 3Q19 4Q19 1Q20
Mil
lio
ns
European Light Vehicle Days' Supply
Inventory
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Global launch activity by quarter
19Source: LMC Automotive
47
150
5968
63
83
4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
Redesigns and New Entries
• 470 launches over 18-month period
• 92 – started but ramp-up impacted
• 214 – expected delayed 2+ months
• 81 – at risk to slip into 2021
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Pan-Europe launch activity by group
20Source: LMC Automotive
1Q20 2Q20 3Q20 4Q20 1Q21
Daimler PSA R-N-M Hyundai Volkswagen Other
31
24 23 22
31
Key Launches and Delays
8 all-new BEV models – 5
from VW Group (inc. ID.3,
ID.4)
Key Volume Models
including: Golf, Qashqai,
Mokka, A3, Kuga
Delays
Disrupted newly localised
models: Jeep Compass,
Hyundai Kona.
Audi A3 to May (2-months)
Nissan Qashqai to Dec (2-
months)
© 2020 LMC Automotive Limited, All Rights Reserved.
North America launch activity by group
21Source: LMC Automotive
1Q20 2Q20 3Q20 4Q20 1Q21
GM Ford FCA Toyota R-N-M Hyundai Honda VW Other
45
10 10
5
Key Launches and Delays
BEV activity – Several start-
ups including Rivian, Karma,
Lucid and Bollinger at risk
Key programs include: F150,
GM Large SUVs, Nissan
Rogue, Tesla Model Y
Delays:
Mustang Mach-E to Sep-20
GM Large SUVs – one month
G Cherokee/G Wagoneer –
3-month delay
Frontier delayed from May-20
to Apr-21
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North America launch delay analysis
0 1 2 3 4 5
High Importance
Medium Importance
Low Importance
2020 SOP delay in months Average delay in region is 2.35 months
with longer delays in late 2Q and 3Q
SOPs.
OEMs are prioritizing new programs
based on importance
Facelift activity is even lower priority and
further down the priority list will be
facelift activity that has not been started
Additional delays dependent on restart
plan and cashflow but several future
programs planned could be impacted as
investment is constrained.
22Source: LMC Automotive
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Final Thought
23
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