World car trends 2016

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World Car Trends 2016

“The New Technology Market Race” New York, March 2016

World Car Trends 2016 2015 | Sources Global Expert Community

Global Media Trends

75 World Car Jurors

Top 25 markets

Countries

All automotive brands [> 150] and models Top opinion leading media (TV | print | online)

News channels

2014 – 2016: > 100 million documents (blogs, forums, networks)

Social channels

Sponsored by: Legend:

 Media Analysis

 Survey

Brands

 Third-Party Research

 PRIME Insights

Content Connected Mobility ›

Safety

›

Autonomous Driving

›

Smartphone Integration

Smart Efficiency / E-Mobility ›

Battery Electric Vehicles

›

Fuel Cell Electric Vehicles

›

Diesel Crisis

Shared Mobility The new competition about the mobility of the future

Connectivity | Key trend in 2016 And key evaluation factor for new cars Connected mobility has always been within the top 3 trends for the last five years, peaking in 2013 as #1.

2012

2013

#1

2014

2015

#1 #1

#1

#2

2016

#1 Connected Mobility

#2

#3

#3

71% Already/Increasingly

#3

“Is connectivity a key factor in evaluating a car?”

78% Already/Increasingly

+7pp

No

Not yet

No

Not yet

[12%]

[17%]

[2%]

[20%]

 “What are the most important trends in the automotive industry in 2012 / 2013 / 2014 / 2015 / 2016?”

2013 & 2016 Expert Panel: “Is connectivity a key factor in evaluating a car?”

4

#1 | Three key drivers for connected mobility #1

New safety features, autonomous driving and smartphone integration are the three key drivers for connected mobility.

New Safety Features

Connected Mobility Autonomous Driving

ď‚ľ PRIME Insights

Smartphone Integration

5

Safety-related driver assistance features with strongest momentum in 2016 New safety features have grown strongly in acceptance due to technological improvements

mixed

important

very important

Pre-Crash Systems Brake Assist Systems

Strongly safety-related

Top 5

Blind Spot Detection Adaptive Cruise Control Pedestrian Detection

“Systems became much better in recent years”

Intelligent Lights Lane Keeping Systems Automated Crash Reporting Traffic Sign Recognition Park Assist Attention Assist

Night vision Systems 0

 “How important and desirable are the following ‘Advanced Driver Assistance’ features from your point of view?”

1

2

2013 Expert Panel

2014 Expert Panel

3

2015 Expert Panel

2016 Expert Panel

6

#2 | Connected Mobility: Autonomous Driving #2

Autonomous driving has arrived in reality and will soon be available in series production cars.

New Safety Features

Connected Mobility Autonomous

Driving

ď‚ľ PRIME Insights

Smartphone Integration

7

Autonomous driving increasingly visible in Global media 2016 all-time high due to tech shows (e.g. CES, Mobile World Congress, etc.) and individual events.

Autonomous cars in series production are expected within the next 3 years.

Fully autonomous driving cars in series production

New alltime high CES 2016

High

are expected by 2019

Tesla Autopilot CES (MB, BMW, Audi, Ford) Breakthrough

IAA (MB S-Class)

Volvo City Safety

Ford Intellidrive

CES "Self-driving cars (Audi) now legal in California" Geneva (CNN) (Volvo Pedestrian Detection)

GM announces hands-free driving Cadillac

Media visibility

Google unveils driverless CES car (Audi A7)

x 10

Low

2010



2011

2012

2013

2014

2015

Global media analysis of all automotive coverage (Top 25 markets – top opinion leading media. Analysis unit: message contacts)

2016

2017

2018

2019 2019

 “When do you expect to see fully autonomous driving cars in series production?”

8

Autonomous driving with no additional momentum in 2016 Steep learning curve over the last three years, changing journalists’ perceptions – the once most-hated Advanced Driver Assistance feature has turned into one of the most admired features.

Autonomous Driving very important and desirable

3

2

2016 Expert Panel

2015 Expert Panel 1

2014 Expert Panel 0

2013 Expert Panel

-1

-2

not important / desirable at all

-3

 “How important and desirable is ‘Autonomous Driving’ from your point of view?”

9

Autonomous driving not limited to luxury cars By 2020, autonomous driving will be a key technology in the full-size and luxury segment, while smaller cars as well as fun-cars (sports cars & convertibles) will have a lesser degree of autonomy.

No autonomy

Restricted to information & warning systems

Assist (e.g. adaptive cruise control)

Full control (Auton. driving)

Subcompact Cars (e.g. smart fortwo, Fiat 500) Compact Cars (e.g. Ford Focus, VW Golf, Toyota Corolla)

Mid-size cars (e.g. BMW 3-series, VW Passat) Full-size cars (e.g. MB E-Class, Audi A6)

Full-size luxury cars (e.g. MB S-Class, Lexus LS) Sports cars & convertibles (e.g. Jaguar F-Type, Porsche 911)

2015 Expert Panel

Degree of autonomy  2015 Expert Panel: “From your point of view, what degree of autonomy will find its way to the different car segments by 2020?”

10

USA, Germany, Japan remain key autonomous driving markets Due to high costs and the need for infrastructure, autonomous driving will be strongly pushed by the most developed car markets. reluctant

passive/conservative

proactive/aggressive

USA

USA, Germany and Japan are clearly seen as the key markets for autonomous driving.

Germany

Japan

UK

France

China

Italy

2014 Expert Panel

Spain

2015 Expert Panel -3

-2

-1

0

1

2

3 2016 Expert Panel

 “Which markets will be the key drivers for autonomous driving?”

11

Safety is key to consumer acceptance of autonomous driving However, Car-to-Car communications and ethics are also seen as roadblocks before autonomous driving can be fully rolled-out to the markets. mixed

important

very important

Legislation is the BIGGEST challenge to enabling autonomous driving

Legislation (on federal & national level)

Safety is the key to consumer acceptance of autonomous driving.

Safety Industry standards for Car-to-Car and Car-to-X communications

Ethics (e.g. system decision in crash situation)

Integrity of technology Consumer acceptance Infrastructure investments Data protection Extra costs New players (like Apple, Google) New business models & scenarios (e.g. car sharing)

Google and Uber with visions of shared mobility via autonomous driving cars are fuelling new business models 0

1

2

 “From your point of view, how challenging are the following aspects to enable autonomous driving?”

3

2015 Expert Panel

2016 Expert Panel

12

#3 | Smartphone Integration #3

Smartphone integration makes cars much more personalized and extends the “connected self” to the car space.

New Safety Features

Connected Mobility Autonomous Driving

 PRIME Insights

Smartphone

Integration

13

The most important infotainment feature – smartphone integration – means an integration of Apple and Google A full smartphone integration also implies full audio integration and navigation and web access, making a lot of current features redundant. mixed

important

very important

#1

Smartphone integration Audio features (e.g. Bluetooth audio streaming, webradio, satellite radio, USB-audio interface)

Google (Android) and Apple (iOS) together have more than 98% Global market share for smartphones (operating systems).

Navigation system (e.g. also for safety interaction with predictive route-data, etc.)

Web access (e.g. apps, web-based traffic information and infotainment, access to search engines) Virtual cockpit / user-programmable instrument cluster (e.g. Audi TT) Head-up display Voice control Personalisation through learning algorithms and context awareness Communication features (e.g. e-mail functionality, communication apps) Touchpad / touchwheel Operator services (e.g. for reservations, bookings, remote vehicle diagnostics) 2015 Expert Panel

Converging of Connected Car and Smart Home

Gesture control (e.g. recognition of ‘swiping’ or ‘pointing’)

2016 Expert Panel

Wearables (e.g. smart watch connected to car) -1

0

1

2

 “Here is a list of in-car infotainment, communication, navigation and human/machine interface features. How important and desirable are the following features from your point of view?”

3

14

Domination by Google and Apple in the smartphone OS market Apple’s iOS with a somewhat constant market share over the last 7 years, whereas Google’s – free – Android OS grew to an exceptional market domination. Windows phones and RIM OS only account for less than 2% of sales in 2015. While Symbian used to have more than 60% market share in 2007, it has now completely disappeared from the market.

4 out of 5 phones are running on Android

100% Global market share held by the leading smartphone operating systems in sales to end users from 1st quarter 2009 to 4th quarter 2015

90% 80%

Globally, every second phone sold to end-users is running on Android OS

70%

Global smartphone sales (2015)

60%

82% 98% market share

50% Other 2%

40% 30%

16%

3GS

20% 4S 5

10%

6/Plus

5S/C

4

6S/Plus

0% Q1

2009

Q2

Q3

Q1

2010

Q2

Q3

Q4

Q1

2011

Q2

Q3

Q4

Q1

2012

Q2

Q3

Q4

Q1

Q2

2013

 Statista.de: Global market share held by smartphone operating systems 2009-2015

Q3

Q4

Q1

2014

Q2

Q3

Q4

Q1

2015

Q2

Q3

Q4

Q1

2016

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2017

15

“Apple CarPlay” wins strong momentum in 2016 Google’s Android Auto is not widely available yet, whereas Apple CarPlay was rolled out widely in 2015.

2

very good

1.5

1

0.5

mixed

0

2015

2016

 “From your point of view, how would you rate the infotainment systems of the following car manufacturers / tech companies?”

16

OEM infotainment systems are still industry benchmark However, Apple and Google are very close with their infotainment offerings and are much better-evaluated than the worst 5 OEM infotainment systems. Tesla with a highly praised infotainment system. mixed

very good

Best evaluated system (= from German premium manufacturer) Tesla

Apple ("Carplay")

Top 5 OEM Systems

Google ("Android Auto")

Worst 5 OEM Systems 2015 Expert Panel

Microsoft ("Embedded Automotive")

2016 Expert Panel

0

1

 “From your point of view, how would you rate the infotainment systems of the following car manufacturers / tech companies?”

2

3

17

Content Connected Mobility ›

Safety

›

Autonomous Driving

›

Smartphone Integration

Smart Efficiency / E-Mobility ›

Battery Electric Vehicles

›

Fuel Cell Electric Vehicles

›

Diesel Crisis

Shared Mobility The new competition about the mobility of the future

E-Mobility remains a top trend in 2016 E-Cars is ranking second, only beaten by connectivity.

2012

#1

2013

#1

#2

2014

2015

#1

#1

2016

#2 #2

#2

#2 Smart Efficiency / E-Mobility

#3

Milestone:

> 1m e-cars on Global roads  “What are the most important trends in the automotive industry in 2012 / 2013 / 2014 / 2015 / 2016?”

 Source: zsw-bw.de | Includes: BEV, BEVx and PHEV. Does not include mild + full hybrids, motorcycles and commercial vehicles.

19

Key drivers for the E-Car trend are range, charging infrastructure and decreasing costs E-Mobility increasingly thrives on merit instead of regulation. Stricter emission standards, oil prices, etc. become less important in the drive towards E-Mobility. not important at all

mixed

very important

Increased range Advanced battery technology

Top 5

(cheaper batteries with higher capacity)

Quicker charging Better charging infrastructure (availability of charging stations)

“The ease of access to charging points that work. Not only are many more needed, but they need to be in convenient places, and a charger available when you arrive at one. Which works.

Real-world practicalities like these are underestimated.”

Decreasing purchasing costs Government incentives

Stricter emission standards Low electricity cost High oil price Lightweight technologies Fun to drive

Tesla Model X: +333kg compared to Model S = 2,441kg.

Clean electricity production New players on the market (e.g. Apple, Google or Amazon)

Increased popularity of shared mobility Stagnating efficiency of IC engines -3

-2

-1

0

1

 “From your point of view, how much will the following factors influence the roll-out and success of Battery Electric Vehicles (BEV)?”

2

2015 Expert Panel

3

2016 Expert Panel

20

China and USA with strong e-mobility momentum Germany with poor performance paving the way for e-mobility, still without any form of incentives.

very poor

mixed

very good

Norway Japan

Germany France

China

Ambitious plans:

USA

Strong momentum

5 million e-cars in 2020

UK Italy Spain -3

 “Which markets will be the key drivers for e-mobility?”

-2

-1

2014 Expert Panel

0 2016 Expert Panel

1

2

3

21

Norway: EVs achieve a 19% market share in ’15 Despite being surpassed in 2015 by the Netherlands regarding overall sales, Norway remained the top EV market in the world with regards to market share.

Electric vehicles registration figures in Norway 40,000

›

The EV market in Norway grew by 50% in 2015 and 130% in 2014 compared to previous years

›

No purchase tax, no VAT and no tolls are making EVs very attractive.

›

Free and extra parking areas for EVs.

›

EV infrastructure.

›

Clean Norwegian energy production.

35,000

+ 50% 30,000

25,000

20,000

+ 130% 15,000

10,000

5,000

0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

 Source: zsw-bw.de | Includes: BEV, BEVx and PHEV. Does not include mild + full hybrids, motorcycles and commercial vehicles.

22

China becomes #1 Global market for e-mobility Slow-down in America, but breakthrough in China. Germany with a very low performance in 2015, overtaken by most other European markets. Also smaller markets like Netherlands or Norway have sold more e-cars than Germany in 2015.

New EV registration figures by market Total number of different electric models on Global roads by December 31st, 2015

250,000

Nissan Leaf Tesla Model S

200,000

Chevrolet Volt Mitsubishi Outlander PHEV

Factor x 1.8

150,000

Toyota Prius PHEV BYD Qin PHEV

BMW i3

100,000

0

50,000

•

Netherlands

•

Norway

•

UK

•

France

•

Germany

50,000

100,000

150,000

200,000

0 2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

 Source: zsw-bw.de | Includes: BEV, BEVx and PHEV. Does not include mild + full hybrids, motorcycles and commercial vehicles.

2018

23

New energy vehicle production in China takes off in 2015 China tries to achieve its ambitious goal of 5 million e-cars in 2020 by high tax breaks on electric vehicles.

120,000

100,000

Commercial PHEVs

80,000

Commercial EVs

60,000

40,000 Passenger PHEVs 20,000 Passenger EVs 0 Apr '14

May '14

Jul '14

ď † Source: miit.gov.cn

Aug '14

Sep '14

Oct '14

Nov '14

Jan '15

Feb '15

Mar '15

Apr '15

May '15

Jun '15

Jul '15

Aug '15

Sep '15

Oct '15

Nov '15

Dec '15

Jan '16

Feb '16

Mar '16

Apr '16

May '16

Jun '16

24

USA still leading in total number of EVs Despite being surpassed in 2015 by the Netherlands regarding market share, Norway remained the top EV market in the world with regards to market share.

Total number of electric vehicles on the road by January 1st of each year

450,000

# charging stations / outlets in the US (US Department of Energy; as of February 2016)

400,000

40,000

55% market dominance

by USA and China

30,847

30,000

350,000

20,000

12,271

10,000

300,000

USA 31%

Other 45%

China 24%

0 Charging stations

250,000

Charging outlets

200,000 150,000 100,000

50,000 0 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

ď † Source: zsw-bw.de | Includes: BEV, BEVx and PHEV. Does not include mild + full hybrids, motorcycles and commercial vehicles.

2019

25

E-Cars still heavily subsidised Netherlands with relative low tax break on purchase, but the highest recurring tax exemptions. Norway, China and Italy also with (lower) recurring tax exemptions. All other markets with one-off purchasing tax break.

Tax breaks on purchase and use of electric cars (January 2014)

Norway

Most important EV incentives

Free toll roads

16,910 €

China

No purchase tax

7,546 €

France

6,022 €

Japan

5,976 €

United States

High recurring tax exemptions

5,365 €

Italy

3,810 €

Germany

Access to bus lanes

14%

Free parking

11% 10%

Free charging

4%

Charging Network

4%

Free ferries

150 €

0€

15%

Low annual road fee

5,512 €

Netherlands

17%

Low fuel costs

6,500 €

UK

23%

5,000 €

10,000 €

15,000 €

20,000 €

2%

0%

5%

10%

15%

20%

25%

McKinsey & Company

 Most important EV incentives: “Norwegian electric car user experiences” study of the Norwegian Electric Vehicles Association

26

Four out of six top EVs are made in America BEVs gain further credit in 2015 due to i3 and Tesla Model S – Premium electric vehicles might be the game changer in the future. very poor

#1

Tesla Model S

#2

Chevrolet Volt

#3

Chevrolet Bolt

mixed

very good

New US EV leadership

…

…

#6

Tesla Model X -3

-2

-1

 “How would you rate the following e-cars from a general perspective?”

0

1

2

2016 Expert Panel

3

27

Tesla Model S is the most visible car in US media in 2015 While the actual market share of the Model S is quite low, its media presence in US media is outstanding.

Top 3 vehicles in US media in 2015

Tesla Model S

Ford Mustang

2.8%

Chevrolet Corvette

2.1%

0%



#1

3.3%

1%

2%

3%

Global media analysis of all automotive coverage (US market – top opinion leading media. Analysis unit: message contacts)

4%

5%

28

Tesla’s irrational business model OR “The Big Bet” Tesla is particularly strong in the US, but didn’t profit from the high momentum in China in 2015. Tesla is making constant losses since 2008. = ~ 3% of Ford‘s annual revenues

4500 4000

4,046

Tesla's revenue (in m USD)

-200

3,198

3500

-83

-56

-74 -154

-300

3000

-254

-294

-400

2500

2,014

-396

-500

2000

-600

1500

-700

1000 500

0 -100

15

112

117

204

-800

413

-900

0

-1000 2008

2009

2010

2011

2012

2013

2014

2015

Tesla's net income/loss (in m USD)

2008

2009

2010

-889 2011

2012

2013

2014

2015

2500 Tesla's revenue by region (in m USD) 2000 1500

Other markets

1000

500 0 2012

 Source: Tesla 2015 annual report

2013

2014

2015

2016

2017

29

Fuel-cell technology ramps-up for a second time In the last 10 years, Honda showed the strongest ambitions of all manufacturers regarding fuel cell technology, followed by Hyundai/Kia and Mercedes-Benz, and, more recently, Toyota.

Fuel-Cell “Hype“ period

Attention-shift to BEV

Re-Focus on FCEV

Comeback as “Next Generation EV”?

Most major manufacturers focus on FCEV as battery technology is not improving fast enough and the range issue, as well as high costs, are considered hard to solved.

First volume BEVs available on market and hype begins. OEM‘s shift focus on battery electric vehicles instead of continuing their FCEV strategy.

Manufacturers, especially Toyota & Hyundai/Kia, continue to focus on FCEV. In 2014, announcements of affordable FCEVs in series production strongly increase.

FCEV in series production (announcements): Honda: 2016

FCEVs will become a threat to BEVs or ICE vehicles in

2030

2.0%

1.5%

1.0%

0.5%

100% = all automotive coverage in respective year

2030

0.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030



Global media analysis of all automotive coverage (Top 25 markets – top opinion leading media. Analysis unit: message contacts)

“When will fuel-cell electric vehicles (FCEVs) become a threat to either BEVs or internal combustion engined vehicles?”



30

Toyota clearly dominates FCEV coverage in 2015/2016 YTD Hyundai and Honda are also highly visible with their fuel-cell technology.

60%

“There’s an emerging rivalry between two different technologies for zeroemission transportation: battery-electric cars and hydrogen fuel-cell vehicles.”

“The relationship between hydrogen and pure electric cars is a fascinating topic that’s only going to get more interesting.”

Other 16% 11%

13%

100% = all fuel-cell coverage



Global media analysis of all automotive coverage (Top 25 markets – top opinion leading media. Analysis unit: message contacts)

31

Hydrogen infrastructure is the biggest challenge for FCEVs While costs are an issue for both technologies, FCEVs are much less dependent on advanced battery technology and increased range. less important

mixed

very important

Advanced battery / fuel-cell technology (BEV: cheaper batteries with higher capacity / FCEV: lower production costs, higher efficiency)

Increased range Rapid charging possibility General charging / refuelling infrastructure / availability Decreasing purchasing costs Government incentives

Stricter emission standards High oil price Lightweight technologies Low electricity costs / Low operating costs Fun to drive Clean electricity / hydrogen production New players on the market (e.g. Apple, Google or Amazon)

BEV 2015 Expert Panel

Stagnating efficiency of diesel / petrol engines

FCEV 2015 Expert Panel

Increased popularity of car sharing -1

0

1

 “From your point of view, how much will the following factors influence the roll-out and success of Battery Electric Vehicles (BEV)?”

2

3

32

Key markets for FCEVs are USA, Germany, Japan and South Korea Linked to the involvement of Japanese, German, American and South Korean manufacturers in the FCEV technology, their home markets are seen as the key drivers for this new technology. reluctant

passive/conservative

proactive/aggressive

Japan

USA, Germany, Japan and South Korea are clearly seen as the key markets for FCEVs.

Germany

USA South Korea China UK France Italy 2015 Expert Panel

Spain -3

-2

-1

 “Which markets will be the key drivers for FCEV technology?”

0

1

2

3

33

Hydrogen infrastructure is the key to FCEV success Car sharing or new players won’t have any impact on the success of FCEVs. Interestingly, “Fun to drive” is also not seen as a key factor. not important at all

mixed

very important

Hydrogen refuelling infrastructure Advanced fuel-cell technology (lower production costs, higher efficiency)

Decreasing purchasing costs Government incentives Low operating costs

Stricter emission standards High oil price Increased range Clean hydrogen production

Lightweight technologies Fun to drive Stagnating efficiency of ICE New players on the market (e.g. Apple, Google or Amazon)

2015 Expert Panel

Increased popularity of car sharing -3

-2

-1

0

1

 “From your point of view, how much will the following factors influence the roll-out and success of Fuel Cell Electric Vehicles (FCEV)?”

2

3

34

Praise for all fuel cell vehicles FCEVs receive a lot of praise from the experts.

mixed

very good

Toyota Mirai

Third generation FCEV Honda FCEV (Concept)

Hyundai ix35/Tucson FCEV 2015 Expert Panel 0

 “How would you rate the following FCEV from a general perspective?”

1

2

3

35

“Pain-free, fuss-free – quite enjoyable, as is the experience of driving an electric vehicle.”

Overall positive driving experience of FCEV.

“[…] a very good way to drive in terms of dynamics […] no range problems and no battery issues, close to the ideal.”

“Impressed by how normal it is to drive and how production ready it is.”

“They're impressive for their ease of driving, quietness, range and speed of refuelling.”

“It’s an e-car and drives like an e-car.”

“Completely unremarkable - just like a regular electric car.”

“It's a different driving behaviour. You are more focussed on saving energy while driving than enjoying the fun of driving dynamics.”

“They remain, to my mind, a bit unrefined and in need of more work.”

“They are uneventful and dull, overweight vehicles with futuristic pretensions, like most BEVs.”  “Have you driven a “Fuel Cell Electric Vehicle” (FCEV) yet? If yes, what was your experience?”

36

NEW | The NOx emissions crisis is a Global crisis Only a few experts think that the crisis will remain in the US.

35%

35% think that Diesel will only suffer in the US.

 Special survey January 12th, 2016: “In which markets will diesel suffer from the crisis?”

60% 60% think that Diesel will also suffer outside the US.

37

But… Is Diesel dead?

Toyota has made a bold move to slowly phase out its diesel engines, whilst journalists raise note on the environmental impact.

Toyota heralds the end of the diesel-engine

Dirty secrets

“The Japanese car industry slowly says goodbye to the diesel engine. Toyota has announced to stop developing new diesel engines.“

welt.de, 11.11.2015

“Some fear that this may be the “death of diesel”. So be it. There is still scope to improve the venerable petrol engine; and to switch to cleaner cars that run on methane, hydrogen and electricity, or are hybrids. A multibillion-dollar race is already under way between these various technologies, with makers often betting on several of them as the way to meet emissions targets.”

This is Toyota's plan to stop making gas and diesel cars

Economist.com, 26.09.2015

“While petrol-reliant cars will not be completely eliminated in the future, especially in some regions of the world, Toyota is predicting gas and diesel car sales will be near zero in about 30 years.” techradar.com, 14.10.2015

The Dimming of Diesel Fuel’s Future in Cars

Hybrid technology to fill autos gap as diesel damaged by scandal

“Gasoline-powered cars are not the only ones that makers of diesel cars have to worry about. Coming up in the fast lane, even if there’s little traffic there now, are hybrid and electric vehicles.”

“With diesel potentially falling out of favor, automakers and their technology suppliers will likely turn to non-diesel solutions in a stricter regulatory environment. Over the next five years and beyond, auto industry officials see hybrid technology - especially heavily electrified plug-in hybrid know-how emerging more into the mainstream.“

Nytimes.com, 08.12.2015

Reuters.com, 28.10.2015

 Various Online Sources

38

Content Connected Mobility ›

Safety

›

Autonomous Driving

›

Smartphone Integration

Smart Efficiency / E-Mobility ›

Battery Electric Vehicles

›

Fuel Cell Electric Vehicles

›

Diesel Crisis

Shared Mobility The new competition about the mobility of the future

Shared mobility – an ignored Trend?

Shared Mobility has always been ranked last in our survey since 2012. Nevertheless, the topic seems to slowly gain momentum.

2012

2013

2014

2015

2016

Percentage of experts rating trend as extremely important

#1 #2

#3

#3

Shared Mobility

20%

#4 #5 #6 #7

#7

#7

#7

#7

 “What are the most important trends in the automotive industry in 2012 / 2013 / 2014 / 2015 / 2016?”

40

Uber | The new game changer paving the way for shared mobility Uber even announced to develop self-driving cars.

UBER-Facts: ► Worth 62.5b USD ► 1/10 of Apple’s value ► Active in > 50 countries; 400 cities ► China: Ø > 1m rides daily ► 2015: > 10b USD in global bookings

New competition: Uber competitors Lyft (United States), Didi Kuaidi (China), Ola Cabs (India), and GrabTaxi (South-East Asia) (all of which have Softbank as an investor) announce a global technology and service alliance. With the exception of Lyft (which is the runner-up to Uber in the United States), all the other companies in the partnership are market leaders in their respective regions of focus.  Source: wikipdia.com; newsroom.uber.com

41

Future access technologies pave the way for an increasingly “shared” mobility Volvo presented a smart key system at the Barcelona “Mobile World Congress“ which can provide timelimited access to the car.

 Source: media.volvocars.com

42

Content Connected Mobility ›

Safety

›

Autonomous Driving

›

Smartphone Integration

Smart Efficiency / E-Mobility ›

Battery Electric Vehicles

›

Fuel Cell Electric Vehicles

›

Diesel Crisis

Shared Mobility The new competition about the mobility of the future

Future technologies are paving the way for new players ‌ as well as new business models in the automotive sector. The current hype surrounding connected mobility is mainly driven by three topics: Autonomous driving, smartphone & internet integration and new controls & displays.

Connected Mobility

New Chinese Competitors

Additional competitors Future Technologies

E-Mobility

Shared Mobility

New business models

ď‚ľ PRIME Insights

44

The hype is over In 2016, most experts think tech companies will become a threat in 10 to 15 years, whereas in 2015, they estimated between 5 and 10 years.

2016

18%

56%

2015

38%

68%

“Within the next 5 years”

“Within the next

10 years”

22%

22%

16%

19%

“15 years or longer”

“Never”

 “When will tech companies (like Apple, Google, Amazon) become a challenge to the established car manufacturers with their own cars?”

45

OEMs are seen as key drivers for the “digital car” Google and Apple are clearly seen as technology providers, but the main push still comes from the established OEM’s. Microsoft and other tech companies play a tertiary role. passive/conservative

proactive/aggressive

OEMs themselves

Established

(e.g. Toyota, Audi, Tesla, BMW, Mercedes-Benz)

Automotive suppliers (e.g. Continental, Harman, Delphi)

New tech-driven Chinese brands (e.g. Faraday Future)

Other tech companies (e.g. Blackberry, CloudCar) -1

0

 “Which companies will be the key drivers for the ‘digital car’?”

1

2015 Expert Panel

2

2016 Expert Panel

3

46

New Chinese competitors play an increasingly role in electric mobility Only 18% believe that they won’t succeed at all.

Only 18% of the experts think that the new Chinese competition will never become a threat to the established car manufacturers.

18%

12 Years

“Never”

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

 “When will any of the Chinese new players //(like Faraday Future, Harmony Futeng (Tencent))// become a threat to established car manufacturers?”

2029

2030

47

New Chinese competitors need to raise their profile outside of China Low profile and low trust in the success of the new Chinese competitors.

All Chinese experts know the new Chinese brands not likely at all

Only 82% of the Global experts know e.g. Faraday Future Publicity

very likely

82% 100%

Faraday Future (LeTV) 70%

Greatwall Huaguan (www.ch-auto.com)

100% 64%

Harmony Futeng (Tencent & Foxxcon)

100% 56%

Wanxiang Auto (www.wanxiang.com.cn)

100% 60%

Nextev (www.nextev.com)

100% 58%

Pateo (www.pateo.com.cn)

100% 54%

Ali Auto (www.alcheche.com)

100%

58%

Xiaopeng Auto (www.xiaopeng.com)

Zhicheauto (www.zhicheauto.com)

100% Chinese experts -3

-2

-1

52%

2016 Expert Panel

All experts 0

1

2

100% 3

0%

20%

40%

60%

80%

100%

mixed

 “In your opinion, will the new EV/tech-driven Chinese car brands succeed with their own vehicles?”

48

…but “they don't know what they don't know.”

Low profile and low trust in the success of the new Chinese competitors.

• “The Chinese have no idea how hard it is to design, engineer and sell cars.

They need to undercut on price to get people to take a risk and buy one of their unknown cars. But as their costs go up they need to charge more (and therefore discount less). It's a steeper climb and a longer journey than they realise. And frankly I'm sick of their arrogance "we're going to overtake Toyota by 2020". Get real.”

• “No brand recognition outside of China (perhaps). Too big a time lapse before the tech becomes viable on a large scale for these small companies to survive. No product to sell.”

• “Step away from copying. Hire very experienced engineers from western brands, (copy S-Koreans who were able to catch up quite quickly, recent example = Hyundai hiring Biermann from M GmbH for their N-division).

Imply connectivity/safety features asap.”

• “To not be perceived as a Chinese company. To have production outside of China. To rely on established suppliers. To pass EU and U.S. federal safety standards. To establish strong dealership networks who demonstrate an ability to quickly and properly service vehicles; MG Motor UK, one of the first Chinese ventures in the west, has not done a good job here.”

 “From your point of view, what are the key factors for the new Chinese tech-driven manufacturers //(like Faraday Future, Harmony Futeng (Tencent))// to succeed in the car sector?”

49

Apple and Google with a brand advantage?

Apple and Google have a 10x higher brand value than the Top 10 automotive brands.

Rank

Brand

Percentage change 2015 vs. 2014

#1 #1

Apple

+43%

#2 #2

Google

+12%

Brand value (in billion U.S. dollars) 170m 120m

‌ #6

Toyota

+16%

#11

BMW

+9%

37m

#12

Mercedes-Benz

+7%

37m

#19

Honda

+6%

#35

Volkswagen

-6%

13m

#38

Ford

+6%

12m

#39

Hyundai

+8%

11m

#44

Audi

+5%

10m

#49

Nissan

+19%

9m

#56

Porsche

+12%

8m

49m

23m

0m

ď † 2015 Interbrand ranking

50m

100m

150m

200m

50

Three major challenges for tech companies entering the car biz 1

2

Manufacturing and engineering

Sales and marketing

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Safety

›

Sales and distribution network

›

Quality

›

›

No manufacturing history

Maintenance / service infrastructure

›

Perfection in mechanical terms

›

Image

›

No experience, not much knowledge about car customers

›

Global development requirements

“Striking the balance between manufacturing, quality and sales.”

“Assembly quality is a tricky thing that takes years to get right.”

“I can easily imagine them re-inventing the car as super-sophisticated means of infotainment-in-motion, but the most down-to-earth mechanical problems aren't easy or fast to comprehend.”

“All in all, to keep customers satisfied with new products will be challenging.”

“Car customers cannot be treated by an arrogant business model as for example the way Apple treats its iPhone customers today!”

3 Financial attractiveness ›

Slim profit margin (compared with technology sector)

›

Economies of scale

“Their biggest issue will be their willingness to accept car industry margins of at best 10 percent and at worst in the mid decimals. It's not what they're used to.”

“The challenge that they mount against each other, as non-automotive new entrants majoring on much the same product advantages.

And the possibility of a backlash against their dominance, which might even lead to their break-up.”

 “What will be the biggest challenges for tech companies (like Apple, Google, Amazon) to enter the car sector with their own vehicles?”

51

Contact

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PRIME S達o Paulo (Brazil)

Dr. Rainer Mathes PRIME Research Chairman mathes@prime-research.com

Bernd Hitzemann PRIME Research Project Director hitzemann@prime-research.com

Jens Meiners World Car Awards Director Steering Committee World Car Awards jmeiners@hearst.com