19th Annual Logistics and Manufacturing Symposium LDF and L&MA Port Laredo September 19-20, 2012
The Upward Surge in the Automotive Industry – Today’s and Tomorrow’s Trends Ralph Biedermann Mexico Consulting Group The MRB Group
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Agenda • • • • • • •
Global Auto Sales and Production Trends Technology and Retail Trends Emerging Markets The Auto Industry in Mexico IMMEX Manufacturing Today Mexico’s Economic Outlook Issues on the Horizon
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Global Auto Sales and Production Trends
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Global Light Vehicle Production Forecast (000 Units)
IHS Automotive, July 2012
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Global Light Vehicle Sales Forecast (units)
IHS Automotive, July 2012
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Global Light Vehicle Production - Country
IHS 2011
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Geographic Breadth
IHS 2011
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Global Production – Top 10 Platforms in 2017 (millions)
IHS 2011
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North America Light Vehicle Production Forecast
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North America Light Vehicle Production Forecast: 2012 - 2022 Country
2007
2012
2017
2022
Canada Mexico USA
2,542,150 2,033,658 10,555,043
2,210,000 2,030,000 2,040,000 2,752,000 3,339,800 3,604,400 9,484,400 11,272,870 11,564,100
Total
15,130,851 14,446,400 16,642,670 17,208,500
Polk, July 2012
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North America Light Vehicle Production and Capacity Forecast (000) Production
Canada Mexico U.S. Total
2010
2013
2016
2,060 2,258 7,621
2,052 2,843 10,307
11,941
15,204
Capacity 2010
2013
2016
1,800 3,873 11,670
2,520 2,642 11,393
2,570 2,836 11,976
2,090 3,902 12,506
17,345
16,555
17,382
18,228
IHS Automotive, August 2012
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North America Light Vehicle Production – by Country
Polk
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U.S. Light Vehicle Sales
IHS 2012
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U.S. Light Vehicle Sales – Car Segments
IHS 2012
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U.S. Auto Investment
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Technology and Retail Trends
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Recent Technology Movements o o o o
Energy Efficient/Electrified Vehicles Battery and Fuel Cell Development New Electronic Component Suppliers Government-Industry Partnerships
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U.S. Electric Vehicle Sales
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U.S. Electric Vehicle Sales
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U.S. Electric Vehicle Sales
Note (1)
(1) 0% should be 38.5%
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U.S. Electric Vehicle Sales
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Technology Gaps o o o o o o o
Alternative Fuels Alternative Powertrains (beyond batteries) Bio-materials Lightweight Materials Vehicle Connectivity (Internet) , Communications and Driver Assistance Systems and other Vehicle Electronics How to Meet Higher Fuel Efficiency Standards (54.5 MPG by 2025)
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Retail Trends o Sales Growth Driven by Pent-up Demand: used car prices, scrappage rates, vehicle ages, and the number of cars per driver are all outside their historic equilibrium levels o Better Access to Auto Loans and Increased pricing Flexibility o Continued Low Interest Rates o Improved Warranty and Service Options o Increased Investment in Web Marketing and Advertising o Increased Investment in IT Systems and E-Commerce Platforms o Leasing is on the Way Back
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Emerging Markets
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“Follow the Yellow BRIC Road” o Sales volumes in Russia are expected to overtake Germany (3.2 million this year) by mid-decade, becoming the largest market in Europe o Sales in China and Brazil have accelerated to double-digit y/y gains in recent months, bolstered by government stimulus programs o In China, the government created a RMB 6 billion subsidy program for purchases of fuel efficient cars with engines of less than 1.6 litres o In Brazil, car sales have jumped 25% y/y since the government unveiled a new US$10bn stimulus package, including suspending an industrial tax and freeing up nearly US$8.8bn in bank deposit requirements for lenders to boost auto loans o A KPMG survey found 80% of respondents saw China to be the largest automotive market in sales and production in 2016 followed by the U.S. and then Brazil and India o LMC Automotive forecasts that the four BRIC countries will have a combined market share of 43% in 2016
“Follow the Yellow BRIC Road” o On the downside, despite forecasted growth, fears of government intervention are the largest in China and especially Russia and barriers to entry to both markets could be high o China’s market could be the most over-built by 2016 and could have an unused capacity of 6 million units in that year – three times the current size of the German car market o By 2016, the global automotive market could be overbuilt by 20-30 percent o On the non-traditional side, electro-mobility will offer the greatest growth potential in the BRIC countries – depending on which technology is chosen
BRIC Light Vehicle Production Forecast
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Asia – The New Battleground
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China Light Vehicle Production Forecast
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The Auto Industry in Mexico
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Impressive Positions
ProMexico, May 2012
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Some Recent Data o Mexico now is the world’s 8th largest vehicle producer (forecast 2012 production: 3.0 million units) and is the second largest producer in North America (19% share) o In 2012, close to 80% of production will be exported o Total vehicle output through July was 1.65 million units, up 13% from prior year o Total vehicle exports through July were 1.38 million units, up 14% from prior year (full year exports forecast: 2.39 million ) o Domestic market sales this year should hit a record high: 1.06 million; domestic market sales up in July for 29th consecutive month o Mexican new car production/exports now account for 10.3% of US new car sales; second largest country supplier of US new car imports after Japan; through July, exports to US market: 881,853 units o There are now 30 makes of automobiles and SUVs available in the Mexican market (including imported units) o For 2013 the current industry forecasts are: production - 3.3 million units, exports 2.8 million and domestic sales 1.15 million México Consulting Group
Mexico Auto Industry Sales
ProMexico, May 2012
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New Light Vehicle Sales in Mexico January-July
%Variation
2012
JJ12/JJ 11
The “Top 10” Nissan
136,998
18
General Motors
99,791
11
Volkswagen
71,718
2
Chrysler
47,392
6
Ford
44,893
(1)
Toyota
29,455
18
Honda
28,615
60
Mazda
14,900
(3)
Renault
13,744
8
Seat
11,990
22
(a) Includes automobiles, SUVs and light trucks. Sources: Mex. Automotive Industry Association (AMIA), KASO y Asociados
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Mexican Domestic Light Vehicle Sales Forecast
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Mexico Auto Production
ProMexico, May 2012
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Mexican Auto Production Forecast
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Mexico Auto Parts Production Value ($ billions) Year
GPV (a)
2005
50.5
2006
56.0
2007
61.6
2008
59.8
2009
43.0
2010
62.0
2011
66.0
2012*
68.0
2013*
70.0
2014*
71.8
*Forecast as of August 2012. (a) Includes Maquiladoras Sources: Banco de Mexico, National Auto Parts Industry Association (INA), IHS Automotive
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Mexico Auto Exports
ProMexico, May 2012
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Mexican Auto Production by Destination
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Mexican Auto Exports by Region
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FDI in Mexico ($ millions) Total
2005 2006 2007 2008 2009 2010 2011 2012
N/A $20,006 $31,313 $26,889 $15,959 $20,208 $19,440 $19,600 (1)
Manufacturing
N/A $10,007 $13,600 $ 7,809 $ 5,659 $11,542 $ 8,572 $ 9,000 (1)
Vehicles and Parts $2,335.4 $1,728.4 $2,194.3 $1,252.6 $1,295.6 $ 680.3 $ 855.9 $3,152.0 (six mos.)
(1) Y/E Forecast ProMexico, May and July 2012; Banco de Mexico, General Foreign Investment Directorate, National Foreign Investment Registry
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Mexico’s Auto Industry Competition Makes
Makes
Makes
1993
1998
2012
(The Year Before
(NAFTA plus
(44 FTAs
NAFTA)
Other FTAs)
in Place)
Vehicle Type Automobiles
5
14
32
Light trucks
5
7
30
Light vehicles (such as SUVs)
5
14
36
Heavy trucks
5
8
14
Trailer tractors
4
6
5
Passenger buses
5
4
5
Heavy-duty vehicles (off-road)
8
8
16
12
22
52
192
512
1,475
Total makes Total models, new vehicles
Source: KASO y Asociados, with data from 3 industry trade associations (AMIA, AMDA, ANPACT)
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New OEM Projects Announced in 2012 Company
Investment (a)
Daimler-Benz
Plant Location (state)
100
Nuevo Leon
1,300
Sonora, Mexico
Fiat
900
Coahuila
General Motors
990
S. Luis Potosi, Guanajuato
Ford
Coahuila Honda
800
Guanajuato
Mazda
600
Guanajuato
Nissan
2,200
Aguascalientes
Audi
1,300
Puebla
(a) In millions of dollars Source: ProMexico, “MexicoNow”, direct research
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New OEM Projects Pending Announcement Company
Investment (a)
Plant Location (state)
BMW
NA
Queretaro p
Mercedes-Benz
NA
NA
(a) In millions of dollars *As of August
p Probable site
NA = not yet announced
Source: ProMexico, “MexicoNow”, direct research
Other New Plant Possibilities Toyota – no decision yet, probably none this year Infiniti – possible, but seems remote One Chinese automaker – also a possibility, but also a remote one
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Major New Parts/Assembly Projects Announced or Completed in 2012 Company
Parent Country
Plant Location (state)
Canada
San Luis Potosi
Japan
Guanajuato
US
San Luis Potosi
US/UK
Durango, Tamaulipas
Denso
Japan
Aguascalientes
F&P Manufacturing
Japan
Guanajuato
GIS
US
Guanajuato, Nuevo Leon
Henninges Automotive
US
Torreon
Hella Lighting
Germany
Guanajuato
Hyundai Transland
S. Korea
Baja California
Indiana Mills & Mfrng.
US
Coahuila
Janesville
US
Guanajuato,
Johnson Controls
US
Queretaro
Japan
San Luis Potosi
KSR
Canada
Coahuila
Lear
US
Chihuahua
AMB Tools Ahebono Brake Cummins Delphi Automotive
Koito Manufacturing
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Major New Parts/Assembly Projects Announced or Completed in 2012 – Cont’d Company
Parent Country
Plant Location (state)
Canada
Guanajuato
Maruchi
Japan
Aguascalientes
Nippon Metal One
Japan
Guanajuato
Nishikawa Cooper
Japan
Guanajuato
Germany
Queretaro
Japan/UK
Baja California
Japan
Guanajuato
Italy
Guanajuato
Sumitomo Wire Systems
Japan
Chihuahua
THK
Japan
Guanajuato
US
Queretaro, Tamaulipas
Germany
Puebla
Japan
Aguascalientes
Valeo
France
Queretaro
Yutaka
Japan
Guanajuato
Zanini
Italy
Tamaulipas
Magna
Novem NSG Group/Pilkington Omron Automotive Pirelli Group
TRW Automotive Thyssenkrupp Unipres Mexicana
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IMMEX Manufacturing Today
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The Maquiladora Industry •
•
• •
Started as the Border Industrialization Program in 1965, this export promotion program took on the name “maquila” or “maquiladora;” it’s purpose was the create jobs and bring economic development to the border region (technically known as the “frontera”) Initially, companies legally incorporated in Mexico and having a “maquila permit” could temporarily import raw materials and components duty free with the stipulation that the final products had to be exported Gradually “maquilas” were allowed to operate anywhere in Mexico although the majority today are still located in the border cities and states The “industry” had a long period of annual double-digit growth in numbers of plants, employees, and production value – until the recession of 2001; growth since then has been less dramatic
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The Maquiladora Industry – Cont’d • •
In 2006, another export promotion program, PITEX, and the maquila program were combined to form IMMEX, with provisions similar to maquila Manufacturing in the IMMEX industry thru November, 2011, accounted for almost 74% of all manufactures exports from Mexico; 78% of the IMMEX exports were accounted for by former maquila plants
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Key Maquiladora Industry Statistics Number of Operating Plants 1980 1985 1990 1995 2000 2002 2006 2010 (1) 2011 (1)
620 758 1,920 2,267 3,703 3,240 2,813 2,454 2,448
Employment (000) 123.9 217.5 446.3 681.3 1,310.0 1,090.0 1,210.0 1,400.0 1,450.0
Total Exports ($B) 2.52 5.08 14.09 31.10 79.47 57.8 81.9 117.6 132.2
Source: INEGI, CNIME, MRB Research (1) Not including PITEX, ECEX or ALTEX Plants. México Consulting Group
IMMEX Industry Statistics
2007 (1) 2009 (1) 2011 (1) 2012 (2)
Number of Operating Plants
Employment (000)
5,138 5,235 5,045 5,093
1,938 1,617 1,882 2,220
Source: INEGI, Secretariat of the Economy (1) As of September (2) As of May
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Top Ten IMMEX Plant Locations (Manufacturing Only)
Total IMMEX Baja California (a) Nuevo Leon (a) Chihuahua (a) Coahuila (a) Tamaulipas (a) Jalisco Sonora (a) Guanajuato Queretaro Puebla
Plants
Employ. (000)
5,093 917 661 474 393 365 298 241 223 192 189
2,220.0 233.0 233.6 271.7 187.9 167.8 104.7 105.1 71.5 60.5 18.8
*As of May 2012. Figures do not include 1,151 IMMEX companies and employees in the services fields (a) States with strong to dominant presence of maquiladora plants Source: National Statistics and Geographic Institute (INEGI), direct research
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Mexico’s Economic Outlook
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Global GDP Growth (%)
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GDP Growth by Area (%)
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U.S. and Mexican Manufacturing Trends (M/M % Change)
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Mexican Inflation Rates
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Exchange Rates – Pesos to Dollars
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Mexico Consensus Economic Forecast - 2013
UTEP, 4-1-12
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Issues on the Horizon
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A Weak Economic Outlook
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Western European Car Market Structural Shift
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Slowing World Growth
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Trade Slowing Down
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Unemployment Picking Up
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China’s Exports Down
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Employment Growth = Car Sales and Auto Jobs
ScotiaBank, August 14, 2012
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Employment Growth = Car Sales and Auto Jobs
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Jobs
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And More Jobs
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Thank You!
[email protected] www.mexicoconsultinggroup.com
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U.S. Auto Manufacturing Locations
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U.S. Auto Manufacturing
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Mexico Consensus Economic Forecast
UTEP, 4-1-12
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Issues on the Horizon o Eurozone Financial Crisis o Slowing Global Economic Growth
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