Automotive Engineering 2025 - Trends in der Automobilindustrie in den kommenden 15 Jahren

Roland Berger Strategy Consultants Automotive Competence Center Automotive Engineering 2025 April 2011 Dr. Wolfgang Bernhart Dr. Thomas Schlick 1 Editorial Dear reader, In our recently published study, "Automotive 2025", we gave an overview of mega- trends which will heavily impact the automotive industry over the next 15 years. We described ten key findings based on these megatrends, the different scenarios and the key success factors common to them, to help management define their long-term strategy for > Markets, customers and products > Partnerships, business models and the value chain > Organizational structures, employees and necessary changes With this "Automotive Engineering 2025", we take our findings to the next level and outline approaches for coping with the special challenges automotive engineering is facing. We hope you find some time to read through this special edition and would be happy to discuss our perspectives and approaches with you in greater detail. Best regards, Ralf Kalmbach Dr. Wolfgang Bernhart Head of Global Partner Automotive Competence Center Automotive Competence Center 2 A. "MoRE With lEss" – fivE MAin chAllEngEs foR AutoMotivE EnginEE- Ring ovER thE nExt 15 yEARs Cars and systems "closely tailored to the demand for low cost and flexible enough to allow upgrades and personalization" – that's how we described future product and technology trends in our recent "Automotive 2025" study [1]. "R&D will take place close to the market and local R&D centers will be connected by strong, flexible net- works. Partnerships will grow in importance as a way of providing timely access to new technologies, markets and business models." This phenomenon will be independent from the different scenarios ("budget world", "sustainable world", "high tech world") that may develop. Let's first recap the main trends influencing automotive engineering over the next 15 years. > Sales and production will shift further to BRIC markets, but triad markets still account for over 40% of global sales and production > Clear distinction to other vehicles for individual mobility blurring; increasing importance of low-budget cars > Rise of new technologies (materials, electrification, connectivity) > Shortage of qualified employees, especially in traditional triad markets These trends will not only increase the complexity and amount of engineering work, but also call for "delivery at same cost". Before we discuss the resulting requirements to engineering organizations in detail, let's have a closer look at the above mentioned trends first. 1. further shift of sales and production to BRic markets – new "lead markets" developing Sales and production will shift from triad markets especially to the BRIC countries, which will surpass the triad by between 2020 and 2025 in absolute production and sales figures (Fig. 1). Fig. 1: Sales and production of light vehicles by region 2000-2025 [m units], "Base scenario" Sales Production 57 69 114 57 69 114 11% 11% Other 2.8 5% 9% 8% Other 2.8 14% 6% 6% 3% 11% 15% BRI 6.7 3% 11% 14% BRI 6.8 22% 22% China 12.8 31% China 12.4 32% 80% 86% 53% 59% 44% Triad 0.4 44% Triad 0.2 CAGR [%] CAGR [%] 2000 2010 2025 2000 2010 2025 Source: Roland Berger 3 The emerging markets also have different product requirements: while emissions and safety standards are likely to converge, customer requirements remain different. Not only are they looking for a higher share of low-budget solutions, but car functionality will also see different requirements. At the 2011 Shanghai Motor Show, the first Chinese car will be shown featuring speech/audio-enabled online navigation, web access to stock prices, personalized points of interests, music stored "in the cloud" and RSS feeds. In 2025, nearly a quarter of all Chinese car drivers will be younger than thirty, and only around 10% will be older than sixty. By contrast, only 6-7% of all drivers in Ger- many will be under thirty, while the share of elderly drivers (sixty years old or over) will increase to over a third of all drivers. These distinct groups have completely different priorities regarding ergonomics, comfort and driver assistance. Markets like China will therefore not only become more important from a sales and production perspective, but they will also become lead markets for specific tech- nologies. Basic technologies are usually available in all markets, but differentiating know-how is being generated only by applying these technologies in engineering and production and interacting with the customer – "learning by doing" and "learning by using". As centers of economic growth shift and demographics change, new lead markets will arise. These lead markets are characterized by increased competitive intensity, which leads to better designs and faster cost reduction. Empirical studies show that companies actively innovating and developing in the lead markets are more successful than those who try to innovate from the home market only, usually with an ever-widening gap to their competition. Challenge 1: Successful innovation therefore means not only innovation at the right time, but also at the right place – managing a much higher regional complexity. 2. clear distinction to other vehicles for individual mobility blurring – increasing importance of low-budget cars Increasing urbanization and the raise of megacities will lead to massive congestion problems. Coupled with increased environmental awareness, especially in Europe, new forms of mobility (such as car sharing concepts) as well as new means of individual transportation will increasingly gain significance. With new vehicles such as the Renault Twizy ZE (to be launched in 2012) or concept studies shown by GM at the Shanghai Expo in 2010, the portfolio of most car compa- nies will be expanded to include very small vehicles – blurring the formerly clear line to single-track vehicles. At the same time, driven by the increasing share of new vehicle sales in emerging markets, low-budget solutions will become more important and a major source of future growth. To participate in that segment, automotive players need to integrate design effectiveness while leveraging low operating costs with a high share of localized parts (Fig. 2). 4 Fig. 2: Leveraging cost advantages of local production is a "must" for low-budget solutions Local component supply Increasing local content is essential Transportation cost of selected for optimizing production costs components [EUR/unit2)] 84% Dashboard 100 79% Cost of 74% production [%]1) Front bumper 31 65% Rear door 19 Local 55% content 45% [value, %] Trunk 18 Radiator grill 8 Drive shaft 7 Brake cylinder 2 1) Assumption: Cost of production = 100% if local content = 0 Radio 1 2) Assumption: Distance 1,000 km by ship and truck, incl. packaging Source: Roland Berger Challenge 2: Product requirements management will become much more complex – from the market, customer and product portfolio perspectives. Implementing local or locally adapted solutions will also increase requirements for localization. 3. Rise of new technologies Revival of hydrogen fuel cell activities, increasing importance of lightweight materials, electrification of the powertrain, "always connected, always online" – these are just a few examples of the new technologies to be covered by OEMs in addition to their cur- rent technology portfolio.