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Editorial Welcome to the
Deloitte 2014 Truck Study
Dear Reader,
Welcome to the Deloitte 2014 Truck Study.
1
Growth is back on the agenda. While the industry environment remains challenging, the key
question is how premium commercial vehicle OEMs can grow profitably and sustainably in a 2
global setting.
3
This year we present a truly international outlook, prepared by the Deloitte Global Commercial 4
Vehicle Team. After speaking with a selection of European OEM senior executives from
around the world, we prepared this innovative study. It combines industry and Deloitte expert 5
insight with a wide array of data. Our experts draw on first-hand knowledge of both country
6
Christopher Nrk Michael A. Maier and industry-specific challenges.
We hope you will find this report useful in developing your future business strategy. To the 7
many executives who took the time to respond to our survey, thank you for your time and
valuable input.
In our opinion, two strategic options will determine market success in 2024:
1. Focus on the right growth markets and invest in those
2. New business models to open new revenue streams to OEMs
From a global perspective we want to show examples how this strategic options can be successfully fullfilled by
introducing the following topics by our global team:
Aftermarket and, even more importantly, aftermarket pricing can increase an OEMs profitability in
mature markets with slower new vehicle sales.
The telematics market will grow to a size of US$20B by 2024. How do OEMs need to be organize to claim
their piece of the pie?
Staying focused on investing in the right markets is key. We provide insights on how to enter ASEAN
markets.
2014 Deloitte Consulting GmbH
ASEAN 11% 67% 22%
1 Winning in a global market is the key challenge for every truck OEM India
40%
34%
30%
But profitable and sustainable growth is contingent on adjusting the go-to-market approach, ROW 66% 12% 22%
product and service portfolio to local requirements
0 20 40 60 80 100
North America:
eM
South/Central
America 78% 11% 11%
Mi
Global Insights
ASEAN 11% 67% 22%
Western Europe:
Growth through China 10% 70% 10% 10% Low
Telematics
Growth India 66% 34%
Market Brasil 10% 20% 40% 30%
Strategy Russia 50% 40% 10%
Global Insights
Strengthening
Japan: How OEMs Japan 38% 24% 38%
local presence in
Will Succeed in
the right markets 66%
ASEAN ROW 12% 22%
Brands
Products 0% 20% 40% 60% 80% 100%
Development & production
Sales & services Low Cost Mid Market Premium Aftersales
Country growth rates vary widely from a meager 1% for China and Brazil to Insights from OEMs
a staggering 9% for India and 7% for Eastern Europe
Q: In your opinion, how will your companys
turnover develop in the following regions
The truck market is growing, but the pace is fairly slow in the future? (% of respondents)
From 2004 to 2014, sales in the global truck market for MCV & HCV* grew at an average
annual rate of 2.7%, but growth was extremely volatile, ranging from -18% to 37%. HCVs 44%
India
continue to be the dominant segment in the market, with a share of 63%. Between 2014
+9%
33%
and 2024 the global truck market is expected to continue growing at a fairly low rate of Eastern Europe
3.1% per year. The Indian market will be the main driver. +7%
Russia
0%
+5%
Growth is not global it is regional
Growth rates vary widely around the globe. Growth is slowing down in large truck markets Central
56% America
such as China and most of the Triad countries. On the contrary, India, the ASEAN countries, +4%
and Eastern Europe will account for most of the future growth. Central America is showing Asean
67%
dynamic growth as well. More than 70% of incremental sales in 2024 will be generated out- +4%
side the Triad markets. But the solidity of the Triad markets will stabilize the total global truck
11% EU
market in the decade to come. +4%
US
33%
Beyond BRIC +2%
Much of the recovery of the truck industry after the financial crisis was due to the BRIC
markets and their growth opportunities. This is not the only truth anymore. While the BRIC China
44% +1%
markets remain the largest truck markets, other regions have developed more growth mo- Brazil
mentum. It is essential for OEMs to focus on both, the largest markets and the new growth 0% +1%
Japan
regions. 0% +1%
After a volatile period from 2004 to 2013, growth in the global MCV
MCV
and HCV markets is expected to stabilize between 2014 and 2024 HCV
k units k units
CAGR 3.1%
4000 4000
36%
2000 2000
63%
1000 1000
64%
0 0
2014e 2024e 2004 2006 2008 2010 2012 2014e 2016e 2018e 2020e 2022e 2024e
2005 2007 2009 2011 2013 2015e 2017e 2019e 2021e 2023e
HCV
MCV MCV
HCV
From The annual growth rate for the global truck market is projected to be
3.1% for MCV and HCV sales from 2014 to 2024
2.7 M Average annual growth from 2004 to 2014 was 2.7%
trucks in 2014 A nticipated growth rates for MCVs and HCVs are very similar, with HCVs
to 3.7 M remaining the dominant segment in the market with a 63% share
in 2024 1 million additional vehicles are expected to be sold to 2024
Russia
Development of Truck Sales to 2024e by Region +5%
2014e
EU
2014e
116.00
2014e
297.000 2014e China
U.S. +4%
+2%
377.400 195.000 985.00 +1%
461.000 2024e
2024e
469.000 1.090.000 2014e
2024e 2024e
Central
2014e 77.100 Japan
103.600 2024e
2024e
2014e 544.400
Brazil 164.700 2024e 2014e
ASEAN
+1% 168.100
+4%
+9%
181.700 242.900
2024e
2024e
India
South 2014e
America
43.000
+2%
51.100
2024e
Source: IHS Global & Deloitte Analysis, Not allocated countries Rest of World not included, Reference page
2014 Deloitte Consulting GmbH
The Triad and BRIC markets will remain the biggest truck markets in 2024,
despite suffering from slower than average growth in most cases
1.000.000
Market Size:
900.000
The BRIC markets will remain the worlds largest
800.000
truck markets
700.000
India will supersede the U.S. as the worlds second
600.000
largest market
500.000
Struggling European countries such as Spain and
400.000
Italy are expected to have recovered by 2024
300.000
200.000
100.000
0
Saudi Arabia
South Africa
South Korea
Argentina
Indonesia
Colombia
Germany
Australia
Thailand
Vietnam
Ukraine
Canada
Mexico
Poland
France
Turkey
Russia
China
Japan
Spain
Brazil
India
Chile
Peru
USA
Italy
UK
New markets
2014 Rank Triad markets
Source: IHS Global & Deloitte Analysis, Not allocated countries ROW not included, Reference page
2014 Deloitte Consulting GmbH
While many small markets will achieve high growth rates, most of the
above-average growth will come from India, Russia, and Germany
Croatia
The European Truck OEMs expect a growing mid-
16
Slovenia market segment in China which compensates for a
14 Costa Rica slow market growth overall in China
Pakistan
Greece
12
Ireland The economic recovery will allow some EU econo-
Uzbekistan
10 1
Bulgaria mies to move from sluggish growth to above-aver-
2 Spain India
3 Italy age growth rates
8 Malaysia
Latvia Turkey
Estonia
6
Russia
Central and South America show momentum, but
Mexico
4 Czech
cannot compensate for Brazils slow growth pace
Republick Germany China
Uruguy 1 Average CAGR
2 Portugal
2
Romania 2014 - 2024 Eastern Europe will be dynamic although the
3
Kasakhstan Brazil
0 Ukraine crisis may cast a pall
0 50.000 100.000 150.000 200.000 250.000 500.000 1.000.000 Units sold
39.126
55.133
Mature Markets
+4%
82.199
307.138
Germany
+2%
Growth
potential U.S.
91.610 differs in both
Additional Unit Sales traditional and
973.000 developing Emerging Markets
markets
+5% +4%
Russia Indonesia
India
105.080
EU
+5% +1%
East Europe& Russia
China
Turkey Brazil
United States
164.014 ASEAN/Japan
Brazil/S/C America
128.585
ROW
Source: IHS Global & Deloitte Analysis
2014 Deloitte Consulting GmbH
Daimler & Volkswagen are the dominant players in their home market and
compete with a fragmented set of European and non-European players
Manufacturer group
Germany
Registered Commercial Vehicles* in Germany in 2013 Local Brand Footprint Achleitner
Volkswagen
D aimler and Volkswagen benefit from a strong foothold in their home
Borgward
Boschung
market and a balanced portfolio of registered models Bucher
MAN MAN
MAN TGS/TGX MAN L2000 O ther European players such as Fiat and Volvo account for a considerable
Chart 2 (Stacked) Caterpillar
Series < 16t.
China Automobile
number of registrations on the strength of their proximity to Germany
China Hi-Tech Group Co.
and EU free trade CNH Global
Mercedes Mercedes
Mercedes MAN MAN Daimler AG
Sprinter/T1 MAN MAN Bus E icher Motors
TGL-Series Unspec.
Fiat Group Automobiles S pA
MAN
MAN
MAN
Expected German Sales and Production Units of HCV und MCV
Fiat Industrial Group
0 Komatsu 0
2014e 2016e 2018e 2020e 2022e 2024e
Krupp
*Including LCV and Buses Ladog
Unit Sales Production GDP Growth
Source: IHS Group, Oxford Economics, Deloitte Analysis Liebherr
Lindner 2014 Deloitte Consulting GmbH
Manitowoc
A special design in the U.S. market for commercial vehicles strengthened
domestic OEMs and caused foreign OEMs to penetrate via M&A
USA
Registered Commercial Vehicles* in the Unites States 2013 Local Brand Footprint
T he current American truck market is characterized by a strong dominance
Navistar Navistar Daimler AG Ford Group of domestic companies with a long history of vehicle production Manufactu
International International FREIGHTLINER FORD Blue B
Corp. T his dominance can be explained by the market needs for long-haul trans- Caterp
Navistar Grand
Daimler AG
International Ford
STERLING Hendri
Corp. Ford Group
FORD F
Group
Expected U.S. Sales and Production Units of HCV und MCV Hyunda
General General Motors Volvo Truck Geely Isuzu
Motors Group Gr. Automobile CAGR +2.2% J ohn D
Group GMC MACK 600 Hld. k %
VOLVO 600 Kalmar
Volvo 5
Kovatc
General Motors 451 469 4 Marmo
422 444
406 408 Maxim
Paccar Group Paccar Group Isuzu Fiat 400 358 377
PETERBILT KENWORTH ISUZU 377 343 322 3 Mitsub
NPR
278 Motor C
Paccar
Blue Bird 2 Navista
BLUE BIRD 200
Nissan
1 Oshkos
Manufacturer, Model und Manufacturer group. Farbe zeigt Details zu Manufacturer P accar
0 group an. Gre zeigt S umme von Yp: 2013/09 an. Die Markierungen
0 werden
2014e 2016e 2018enach Manufacturer,
2020e Model und Manufacturer2024e
2022e group beschriftet. Die Daten werden P ierce
*Including LCV and Buses unter Country gefiltert, wobei US A beibehalten wird. S parta
Unit Sales Production GDP Growth Terex
Source: IHS Group, Oxford Economics, Deloitte Analysis
Toyota
2014 Deloitte Consulting GmbH
Van Ho
Local players dominate the Russian market where customs duties and tax-
es have shut out large-scale foreign competition
Russia
Registered Commercial Vehicles* in Russia in 2013 Local Brand Footprint
The Russian truck market is dominated by domestic players, with a limited pres-
GAZ GAZ GAZ Kamaz ence of foreign truck manufacturers and few registrations of their products Manufactur
GAZ 53 GAZ Unspec. GAZ 3307 Kamaz Truck Aebi
Whereas the dominant manufacturer, GAZ, boasts a wide range of models, Alvis Gro
GAZ
Kamaz portfolio is relatively limited Amur-ZA
Anhui Xi
Daimler owns a 10 percent stake in Kamaz AvtoVAZ
GAZ
GAZ 3221 Gazelle Kamaz European and Japanese OEMs such as Daimler, Volkswagen and Isuzu aim to Ayats
GAZ GAZ
BAZ
GAZ 66 GAZ harness strong market growth by leveraging a diverse model portfolio.
3308 Beijing A
VW has a small advantage in market presence due to their joint venture with Belaruss
Blue Riv
UralAZ PAZ KAVZ
local MAZ
UralAZ Unspec. PAZ Bus Gr. KAVZ Bogdan
Bus Kamaz Cacciam
Kamaz Truck
Caterpilla
UralAZ LIAZ
UralAZ Truck Gr. LIAZ Bus ChangAn
Volvo
Expected Russian Sales and Production Units of HCV und MCV China Br
Zil Zil
Zil Truck Zil Unspec. Volvo China Fi
CAGR +5.3% China Hi
k %
300 20 CNHTC/
Crane C
240
Isuzu Hino DAF Daimler
Isuzu Elf Hino DAF 10
192 195 Dongfen
Unspec. 200 180 167
MAZ MAZ MAN 174 Fiat Grou
MAZ Heavy Truck MAZ MAN KrAZ 154
unspec Avtokraz
122 111 131 0 Fiat Indu
MAN
Volkswagen 116
Ford Gro
Nissan 100 79
Nissan Cabsta General
Tatra (10)
Guangzh
Gueleryu
0 (20) HaKo Gr
2014e 2016e 2018e 2020e 2022e 2024e
*Including LCV and Buses Hinduja G
Unit Sales Production GDP Growth Hyundai
Source: IHS Group, Oxford Economics, Deloitte Analysis
IFA
2014 Deloitte Consulting GmbH
Ikarbus G
Irizar Gr.
Turkeys emerging truck market is characterized by a mix of global major
Asian and European OEMs with a focus on light / medium-duty trucks
Turkey
Registered Commercial Vehicles* in Turkey in 2013 Local Brand Footprint
T he Turkish truck market is diverse, illustrated by the wide variety of
Mercedes Mitsubishi Ford Ford registered truck brands and the international mix of manufacturers Manufacturer
M.B. Unspec. (CV) Fuso Ford Unspec. Ford Cargo Ciftciler (Ask
Mitsubishi Turkeys proximity to European markets has helped Daimler and other
Fuso Ford Cukurova H
Canter European OEM build a strong presence with a focus on light- and Daimler AG
Unspec.
Fiat Group A
Daimler medium-duty trucks
Fiat Industri
Daimlers strong position in the market is based on a local production and Ford Group
Indonesia
Registered Commercial Vehicles* in Indonesia in 2013 Local Brand Footprint
The Indonesian truck market is still very much in a developing stage and char-
Mitsubishi Fuso Toyota acterized by a strong dominance of Japanese truck manufacturers
Mitsubishi Fuso Canter Unspec Toyota Dyna/Toyoace Unspec.
Daimlers predominant position in the market is mostly due to its acquisition
Toyota
of the Mitsubishi Fuso brand and the suitability of their Canter model for
Daimler Indonesian terrain
Regional proximity and substantial foreign direct investment have bolstered
Toyotas position, especially benefitting its Hino brand. ISUZU is also expand-
ing market share gradually due to their strength in the Medium CV area.
Due to its size and proximity to China some Chinese manufactures are trying
Hino Hino to enter the market but so far with only little quantities
Hino Dutro Hino
Ranger/500
CAGR +3.0%
k %
150 20
Brazil
Registered Commercial Vehicles* in Brazil in 2013 Local Brand Footprint
T he Brazilian truck market is dominated by foreign, global OEMs with the
VW Truck VW Truck Mercedes Mercedes majority of trucks registered to Volkswagen and Daimler Manufacturer
VW Truck unspec. VW Truck M.B. Vario/T2 M.B.
Agrale
709-914-Series S cania and Volkswagen Nutzfahrzeuge are the main models sold in the
C hangAn A
Volkswagen Brazilian market
C NHT C /S in
H aving established a market presence as early as 1953 through the as-
Daimler AG
Mercedes
M.B. MK
Mercedes
M.B. SK
sembly of VW Type 1, Volkswagen accounts for the largest share of new
F iat G roup A
Group over
16t
Group
registrations
F iat Indus tri
VW Truck VW Truck Daimler D aimlers Vario and Atego models are the shining stars of a relatively bal- F ord G roup
VW Truck Delivery VW Truck
Worker/Eletronico anced portfolio of new registrations that bolster its strong position G eneral Mo
Mercedes Hyundai K ia
Scania Scania Scania M.B. Axor
Scania Scania G-Series Scania
Navis tar Inte
Series-4
Scania Mercedes
Expected Brazilian Sales and Production Units of HCV und MCV R enault Nis
Scania M.B. Accelo
Scania
Volks wagen
Ford Ford Volvo Trucks Volvo Trucks Agrale CAGR +1.0% %
k Volvo T ruck
Ford Cargo Ford Volvo Trucks Volvo Trucks Agrale
F-Series FH-Serie Unspec. 300 5
SA Truck Volvo
228 237
220 216 4
Ford 216
200 196
179 180 177 182
Iveco Iveco Iveco Ford GMC
165 165 3
Iveco Iveco Iveco Ford
Cargo
Ford Ford 2
Ford F-250/350 Ford F-Series Iveco Fiat 100
Unspec. Iveco
1
0 0
2014e 2016e 2018e 2020e 2022e 2024e
*Including LCV and Buses
Unit Sales Production GDP Growth
Source: IHS Group, Oxford Economics, Deloitte Analysis Production
Manufacturers outside Europe only play a dominant role in their local markets
New players in The European and North
Even though Chinese OEMs are said to be aspiring to the status of serious competitors
ASEAN and American markets will still be
only 3% of their total sales will be exported. These 3% are low in percentage, but based dominated by local OEMs
Eastern countries
on > 1.000.000 trucks manufactured by Chinese OEMs this still needs to be considered as
competition for regions like Asean or Africa
Exports will remain low due to hard-to-surmount differences in specs and emission stand-
ards between the Triad markets and low-cost countries Chinese OEMs will
Chinese manufacturers are still partly state-owned and follow 3-5 year plans become serious
competitors
Similar trends will occur in India and North America, with North American OEMs focusing
on the South American market and staying out of Europe
* Analysis based on > 50% ownership. Daimler and Foton are treated as separate entities, Volvo and Dongfeng
are treated as separate entities 2014 Deloitte Consulting GmbH
While Daimler will defend its position as No 1 truck manufacturer Tata
seizes the growth in India to overtake Volvo, Dongfeng and Volkswagen
14% 8% 7% 7% 7% 5% 5% 5% 4% 4%
ASEAN
Central Europe
Europe
Greater China
Regional Market Split
Indian Subcontine
Japan/Korea
Middle East/Africa
North America
Oceania
ASEAN South America
Eastern Europe
Europe
Greater China
Indian Subcontinent
Japan/Korea
Daimler Tata Volvo Volkswagen DFM Paccar FAW CNHTC BAIC Group International
Middle/East Africa
North America
2014 Rank (1) (7) (3) (4) (2) (6) (5) (8) (9) (10) Oceania
South America
Germany 24%
EU 13%
Source: Deloitte Global Truck Study 2014
India 10% East Europe 1%
Daimler Unit
Daimler salesSales Volume
volume in 2024ein 2024e
2% 1%
Snapshot of
3%
2%
Daimlers Position
6% China: When Daimler established its first
truck joint venture in the Chinese mar-
30%
ket, competitors such as MAN and Iveco
had already established a solid competi-
6%
tive position. Daimler has not positioned
its own Asian brands in China so as to
achieve maximum unit sales
VW VW
Unit Sales
sales Volume
volume in 2024e
in 2024e
2% 1%
Snapshot of
3%
3%
VWs Position
5% Europe: Volkswagens largest markets are
the Triad markets, with a strong focus on
Europe almost 50% of VWs units will
be sold in Europe
12%
Brazil: By 2024 Volkswagen will sell more
than one third of its production volume
in Brazil, mainly Volkswagen and MAN
47%
269k units trucks
Volvo Unit
Volvo Sales
sales Volume
volume in 2024ein 2024e
Snapshot of
2% 1%
3%
2%
Volvos Position
5%
Triad: The Triad will account for more
than half of Volvos sales, with Europe
(37%) topping the U.S. (16%) in terms of
7%
share
37%
TataTata
Unit Sales
sales Volume
volume in 2024e
in 2024e
2%
Snapshot of
4%
Tatas Position
India: No other OEM is as focused on its
home market as Tata, with India contrib-
uting 92% of its current unit sales. 2024
home market share is even expected to rise
to 94%
India
94% Asean
Other
Source: IHS Global & Deloitte Analysis
2014 Deloitte Consulting GmbH
managed company. Automotives Ltd (MNAL) 45% of a new subsidiary of DFG, remaining 50% of Man Forc
Dongfeng to MAN AG.
Brazil 20%
Selected Truck Manufacturer Acquisitions 2011 2014
Russia 20%
Japan 10%
5/2014 2/2013 1/2013 6/2012 3/2012 4/2011
VW takes over full Mahindra buys AB Volvo has signed Isuzu Motors Limited MAN Force, a JV be- MAN and its Chinese 10%
U.S.
ownership of Scania. Navistars stake in an agreement establishes new joint tween Indian Truck- partner Sinotruk have
Despite VWs large India JVs. M&M com- with the Chinese venture company in maker Force and MAN unveiled a new truck
ownership stake, pletes its purchase of vehicle manufac- Chongqing with its AG was dissolved brand for China and ROW 10%
Scania had remained the Navistar Groups turer Dongfeng Motor partner, Qingling Mo- with Force Motors other emerging mar-
an independently stake in Mahindra Group tors Group. having sold and rans- kets. Called SITRAK
0 20 40 60 80 100
managed company. Navistar Automotives Company Limited ferred remaining 50%
Source: Deloitte Global Truck Study 2014
Ltd (MNAL) (DFG) to acquire 45% of Man Force shares
of a new subsidiary of to MAN AG.
DFG, Dongfeng
10% 30% 50% 70% 90%
Regional diversification
16 European
Union
as a hedge against regional
business cycles
34 China
Economies of scale
13 ASEAN
as a lever to increase profitability
17 South
America
12 India
Relocation of production
as a step to increase profitability
and proximity to growth markets
Source: IHS Global, Deloitte Analysis & Deloitte Global Truck Study 2014
2014 Deloitte Consulting GmbH
4 Who owns whom in the global truck market?
51%
Volkswagen 72% FAW Jie Fang FAW
Scania Trucks Hino Motors Toyota Group FAW Group
Group AG 100% Truck Jie Fang
17%
MAZ-MAN Volkswagen
MAZ-MAN Trucks &
(Belarus) 75% 30% Hino
Buses Scania Isuzu
50%
50%
Cummins-Scania 80% Qingling Severtsalauto
Isuzu HICOM
MAN SE MAN Injection Motors Isuzu
(Malaysia) GAZ FAW TRW Fawer
(USA) (China) 6% (Russia) Deutz (Dalian)
100% (Russia) Commercial
Engine
50% 45% Vehicle Steering
(China)
(China)
20% 51% 29%
GM-Isuzu
MAN Force Qingling Commercial 50%
Trucks (India) Isuzu Motors
Motors 51% Truck
Steyr SITRAK CNHTC/
Jinan 75% 80% 45% (Nafta)
Isuzu
Isuzu 9% PT Isuzu
Xian Shaanxi Commercial Ural
50% Qingling Astra Motors GAZ GAZ
Cummins Heavy-duty 25% 35% Truck of America Truck
Automobile Engineering (Indonesia)
(China) (Nafta)
CNHTC Isuzu
Sinotruk Huanghe Philippines
25% Prince Ashok IPC
Leyland 100%
Automotive
Shaanxi Infotronics Smith Electrical
Private Vehicles 35%
(India)
Uralaz
50%
Jinan Huawo Howo
Trucks Ashok
International Hinduja Group Leyland Iveco Larimar
51% Avia
Motors Astra (South Africa)
Mahindra Iveco
Navistar Iveco
Automotives
Ltd
60%
Nissan Ashok
Ashok Leyland Beijing Automotive
Mahindra & Navistar Leyland
Nissan Vehicles 51% 50% Industry Holding
Mahindra International IC Bus Technologies Iveco-AMT
(India) Iveco Iveco Samotlor
49% (India) 66% (Russia) 33%
51% (Russia)
49% 50%
Mahindra 50%
Nissan Ashok
Navistar Leyland
Engines Powertrain
MWM (India) SAIC-Iveco
Comm. Vehicle Magirus Naveco
International Beiqi Foton Foton (China)
Investment 50% Iveco
Motors
Blue Diamand 100% 51% (China)
25% (Nafta) 75%
Jiangling
DAF
Motors Corp. 50% 100% Volvo Group Eicher Motors Fuso KAMAZ
8% Trucks
11% (Russia)
50%
Kenworth Paccar 50%
50% Tata Group
100% Mercedes-Benz 50%
Trucks Vostok Kamaz
VE Commercial (Russia)
Peterbilt Volvo Trucks Vehicles Eicher
UD Trucks 50%
(India)
Tata Tata Motors
Taiyuan Changan
Heavy Truck Co 50%
Karsan Kamaz Vectra Cummins
Motor Kama
51% 50% (Russia)
(India) Tata
Volvo 76%
Cummins
(India)
*Stand 08/2014
Beiqi Foton
Motors
Foton
33%
21%
50%
Mitsubishi
Group Freightliner
Beijing Foton
Foton
11% Daimler Auman Mercedes Benz
Automotive
Mitsubishi Fuso
Mitsubishi
Fuso
50% Western Star
Mercedes
Benz Other
89% Bharat Benz
100% Western
Li-Tec
Truck Brands by Region Mercedes
Star Benz
(Germany)
99% Engine Holding 50%
GmbH* Other
Fuso
Western Star Foton
100% Freightliner
Mitsubishi Fuso
Rolls-Royce
Daimler Group Deutsche Mercedes Benz Mercedes
Power Systems 100%
50% Accumotive Western Star
Freightliner Benz
50% Trucks
Bharat Benz
Fuso Fuso
Fuso KAMAZ Fuso
Trucks
(Russia) BharatBenz
OEM Other Player 11%
50%
Joint Venture Brand
50% Mercedes
Freightliner
Ownership Mercedes-Benz 50%
Benz
Trucks Vostok Kamaz
Mercedes Western Star
Strategic Partnership (Russia) Benz Trucks
Joint Venture Freightliner
Fuso
Fuso
Source: IHS Global, Deloitte Analysis
2014 Deloitte Consulting GmbH
In 2024, MAN will continue to be Volkswagen Groups top-selling truck
brand, harmonizing technical platforms across VW Group with much potential
22%
43%
MAN
Volkswagen 72%
Scania Trucks Scania
Group AG
17%
Volkswagen
MAZ-MAN MAZ-MAN Volkswagen Other
(Belarus) Trucks &
75% Buses 30%
Scania
50% 35%
Cummins-Scania
MAN SE MAN Injection
100% (USA)
MAN Force
Truck Brands by Region
Trucks (India)
Steyr SITRAK CNHTC/
Jinan Scania
Other Scania
Volkswagen
Scania MAZ-MAN Sitrak
Xian MAN
MAN
50%
Shaanxi
Cummins Heavy-duty
(China) Automobile Scania
Scania
CNHTC
Sinotruk Huanghe
25% Prince
OEM Other Player MAN
Shaanxi
Joint Venture Brand Scania Scania
Scania
Ownership
Volkswagen
Strategic Partnership Nutzfahrzeuge
Dongfeng
Motor Co.
50%
Dongfeng 55%
Dongfeng
Commercial DND 20%
Dongfeng Motor Group Renault
67% Vehicles 45%
(China)
Mack
50% 50% 55% Renault
Dongfeng UD Trucks
Dongfeng Dongfeng
Cummins
Motor
Corporation Engine
Nissan-Diesel
50%
Renault Renault Trucks Volvo
(China)
(China)
18%
15%
100%
UD Trucks
Volvo
OEM Other Player Eicher
Joint Venture Brand
Mack Volvo UD Trucks
Ownership Volvo
Mack
Strategic Partnership Renault
Joint Venture Volvo
15%
Iveco Larimar
Astra (South Africa)
Iveco Iveco
60%
Iveco-AMT
Iveco
Iveco
Iveco Samotlor
(Russia) 33%
51% (Russia) Dodge RAM
50% Other
SAIC-Iveco
Comm. Vehicle Magirus Naveco
Investment 50% Iveco (China)
(China)
85%
SAIC-Iveco
Hognyan
Comm.
Yuejin
Truck Brands by Region
Vehicles
(China)
Other
RAM Iveco
Iveco
Iveco
Hongyan Dodge
Fiat Chrysler
Fiat Group
100% Automobiles
OEM Other Player
Joint Venture Brand Iveco
Ownership Iveco
Strategic Partnership
Iveco Astra
Dodge
Joint Venture
-20
Second New
Pricing Availability of Dealer brand for business
spare parts interface spare parts models
100
90
80
44 30 38
70
57 58
2014 Deloitte Consulting GmbH
60
Winning in the aftermarket requires truck OEMs to extend current busi-
ness models with new service elements and cooperation partners
Trends within the trucking industry are putting increased pressure on OEMs to capitalize on aftermarket sales to support their primary business
Vehicle lifecycle Extended Dealer Support Dealers need Buying sophistication Changing Distribution
part life due to improving quality support to capture price-sensitive Price-sensitive customers demand Networks Will the long-dis-
Private label Use of private, customers lower-priced part options tance freight model change to
value line parts to penetrate the Dealer alternate channel Driver Safety Increased short haul?
price-sensitive market Dealers have employed alternate scrutiny of safety / compliance The Future of Fuel How will
Value-added services channel offerings to serve the programs alternate fuel technologies im-
Expanded value-added services price-sensitive market Alternate dealer suppliers pact aftermarket support ?
offerings to improve service levels Warehouse & Distribution Dealers are developing relation-
and retain business consolidation ships with WDs and OES for non-
Major push to increase scale and proprietary parts
network / buying power
Low-Cost Suppliers 3rd Party Manufacturers Direct Sales with Dealers Retail Environment
These trends manifest themselves across the entire shipping industry ecosystem,
OEMs must devise ways to strengthen relationships with players at each point to succeed
2
Develop loyalty program
Execute end-customer campaigns
Provide dealer incentives
Manage dealers inventory
Impact of profit driver improvements Pricing Evolution From Cost-Based to Value-Based Pricing
Profitability Impact
Variable Cost 6,7% based Economic and
of the best pricing industry trends
alternative?
Weak
Pricing has 3-4 times the effect on profitability Value Pricing is a price setting method that derives the perceived customer value
than other improvement measures Offerings are defined based on customer preferences and willingness to pay
The average 5% improvement in returns on sales A value-based pricing initiative results in a win-win situation for both
from improved pricing creates $1,5 billion of additional customersand the seller
value over 5 years for an average S&P 500 company
New business models have emerged that shift from selling a truck to providing Insights from OEMs
customers with new ways to improve total cost of ownership Q: In your opinion, is the field of telem-
atics important for European OEMs? If
Telematics has undergone a few transitions since first appearing on the scene yes, why?
Having evolved from a supporting role to providing major value-added to drivers, owners,
and OEMs, telematics puts entire new revenue streams within reach. OEMs have traditionally
Because telematics have
focused on two core revenue streams from automotive telematics: an influence on TCO
Vehicle price markup
Telematics subscriptions
Information
But with all the data available and the potential use of that data, even more is possible. Telematics as the central management
element of future service creates added
offerings value
Future OEM business models might focus on services rather than the truck itself
In 2024, the global OEM telematics market may total up to $20B US, with Europe account-
ing for the largest share
Increasing connectivity and mounting cost pressure in the transportation business are the Telematics as an enabler of
Highly important
main drivers for this growth further optimization
for CRM
In a very competitive market, a trucks efficiency increasingly becomes the main buying
criterion for the customer.
Commercial Vehicle Telematics Forecast 2014 2024 for OEM Hardware ($bn)
25
CAGR +17.2%
20 Expected
15
market size is
$11B for
10
telematics by
5 the end of
0
2014
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
ROW
Commercial Vehicle Telematics Forecast 2014 2024 for Aftermarket Hardware ($bn)
Asia
15
Europe CAGR +6.4%
Latin America
10 North America
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 North America Latin America Europe Asia ROW
Source: Visiongain
ROW
& Deloitte Analysis
2014 Deloitte Consulting GmbH
Asia
Usually, telematics are primarily employed to address TCO. Increasingly theAddressed b
view on TCO is broadened to include resources and operations management GIT 3
Total costMedium
of ownership for MCV & HCV vehicles Insights from OEMs Interest
GIT
Commercial Trucks
Q: In your opinion, is the business area
13 T telematics important for European
5 years
45.000 miles
22% 39% 13% 13% 6%
OEMs? (% of respondents) Trailer
Licence
0 20 40 60 80 100
Optimization
80%
Heavy Commercial Trucks of resources
Tyres
Interest
26 T Fuel optimization 70%
6 years 26% 31% 15% 14% 7%
50.000 miles Operations
40 T
6 years 32% 24% 17% 9% 7%
Management
(billing, delivery notes)
50% Insurance
Trailer
70.000 miles
Vehicle
availability 40%
0 20 40 60 80 100
Safety 30% Repair
Tyres & Ma
Fuel1 Wages Overheads2 Depreciation Repair & Maintenance
Insurance Tyres Trailer Interest Licence GIT3
Navigation 30%
Addressed by telematics
More than anything else, increasing cost pressure in the transportation business
Overheads 2
Repair & Ma
drives telematics implementation. In a very competitive market, truck efficiency is
increasingly becoming the main buying criterion for customers.
Wages
Depreciatio
OEM value:
Increase revenue by: Growing truck sales through Providing new business solutions
Boosting truck prices due to enhanced CRM via telematics outside the core automotive field
telematics features Offering fleet management services
2014 Deloitte Consulting GmbH
OEMs telematics assets have business value for other industry sectors
Those without a vision for and a focus on the telematics organization Telematics is not about technology. To win the mar-
have faced greater growth challenges; organizations without a longer- ket against often cheaper aftermarket organizations,
term focus have had difficulty laying the groundwork for innovative OEMs must offer complete solutions
future products and services.
Telematics solutions must be embedded in a service
Start regionally, moving towards global implantation or start as a organization to ensure that OEMs leverage their com-
global entity at the outset; typically seen started as a focused, regional petitive advantage, which is Truck Diagnostics and its
level and scaled up. The drawback is a lack of global consistency at influence on the optimization of total cost of ownership
the outset for data analysis and executive reporting, and an inconsist-
ent customer experience. In addition, the cost of multiple stand-alone The challenge is developing an independent business
solutions is greater and comes at the expense of regional flexibility model with different lifecycles and supply chains for
and customization. the telematics organization
The telematics organization is sometimes grouped together with the In the People dimension, content, application develop-
engineering and IT organizations. This may lead to the organization ment, and integration require a different skill set than
becoming a cost center, limiting future revenue growth focus. truck design or enhancement
Building a telematics organization usually requires expertise and re- OEMs that follow these steps consistently will
sources of limited availability within the organization, which may need win the market
to look externally for talent; skills and know-how. While such a step
may lead to advanced expertise being available, any externally fueled
growth needs to be balanced with organic growth.
Singapore
5M Indonesia
248M
Group S: Per-capita GDPUS$10,000
Group A: Per-capita GDPUS$5,000
Group B: Per-capita GDPUS$2,000
Group C: Per Capita GDP<$2,000
Developed Mature
Market almost saturated Market highly developed
OEMs provide all services OEMs expand business beyond
Maturity
truck sales & after-sales service
16 7 20 9
3 2 6 4 MCV HCV
Market Development
in K Units
Transport efficiency
Logistics volume
Market deregulation
Main Driver
Expanded Developed
Widespread use of trucks Market almost saturated
OEMs expand sales through deal- OEMs provide all services
Maturity
ers
17 71 33 89
2 2 MCV HCV
Market Development
in K Units
Resource development
Trade volume
Government incentives
Main Driver
Nurtured Expanded
Little use of trucks Widespread use of trucks
OEMs make few inroads OEMs expand sales through dealers
Maturity
into the market
1 3
1 1
16 31
1 1 7 1 14 11
MCV HCV
Market Development
in K Units
Resource development
Thailand Plus One
Labor-intense industrialization
Main Driver
Focus Area After-sales Start of customer Remanufacturing New truck Parts sales
network development management business sales
Source: IHS Global & Deloitte Analysis
2014 Deloitte Consulting GmbH
OEMs must tailor their market growth strategies to a set of
very diverse market needs
Vietnam Enter the market via the used vehicle business since
Cambodia new vehicle market growth will be slow due to local
policies and poor infrastructure
Myanmar Remanufacturing
Business
Laos
Recommended Hub-Approach
For products traded among ASEAN member states, tariffs To tackle the growing and dynamic ASEAN markets
are decreasing while technological and homologation
requirements are becoming harmonized and comply with ASEAN content requirements,
OEMs commonly use one country as a regional hub,
taking advantage of low regional trade barriers
To enjoy these benefits, an ASEAN-produced content of
40% is required
Considerations when establishing a regional ASEAN
hub include
Goods brought to the ASEAN region are subject to the respective -D ifferent entry tariffs and regulations for
requirements, incentives and tariffs of the entry country
each member state (e.g. CKD regulations)
-R egional and bilateral FTAs
ASEAN has concluded FTAs with China, Japan, South Ko- - L ocation decision criteria (e.g. the right set of
rea, India, Australia and New Zealand location decision criteria to make sense of dif-
ferences in factor costs, workforce qualification,
infrastructure etc.)
Some ASEAN member states have concluded bilateral FTAs
Individual markets should be addressed as required
by their respective size, maturity, and import duties
*FTA= Free Trade Agreement
CBU (Completely built-up) CKD/SKD and CBU Tariffs LCVs, Trucks and Heavy Trucks1)
Vehicles do not require any additional assembly
Indonesia Malaysia
High effective tariffs
Higher transportation cost Regular
EU China India
Regular
EU China India
Customs Rate Customs Rate
50
CKD/ SKD (Completely/ Semi knocked down)
40 40% 40% 40%
Local assembly complies with ASEAN content 30
26% 30% 30% 30% 30%
requirements 20 20%
But local assembly adds supply chain complexity 10 15%
10% 10%
0
Applicable CKD/ SKD requirements to be considered 0% 0% 0% 0%
Lower effective tax rate
Leverages location factors
Thailand Vietnam
Regular
Regular EU China India
EU China India Customs Rate
Customs Rate
50 50% 50% 50%
40 40% 40% 40% 40%
30
20 20% 20% 20%
15% 15% 15%
10
5%
0
Effective Duty Rate CBU Effective CKD/SKD Rate Gap Tariff for individual parts applicable
1) Based on Tariff Codes 8704.22 (GVW > 5t 20t ) and 8704.23 (GVW > 20t). Including individual customs rate, excise tax and other import
fees. Serves as an overview and does not include rates applicable to special types of LCVs, trucks, and heavy trucks
2014 Deloitte Consulting GmbH
OEMs have taken bolt action to win in the ASEAN market,
with creating customer value at the core of the initiative
Business Cases
Authors
Christopher Nrk Ranjit Singh Britta Mittlefehldt Julia Pabst
Partner DC Principal Manager Senior Research Analyst
Deloitte Consulting Germany Deloitte Consulting United States Deloitte Consulting Germany Deloitte & Touche Germany
cnuerk@deloitte.de ransingh@deloitte.com bmittlefehldt@deloitte.de jpabst@deloitte.de
Austria Latvia
Belgium Lithuania
Trailer/
Trucks Buses Vans semi-trailer Other Bulgaria Netherlands
51%
Volkswagen 72% FAW Jie Fang FAW
Scania Trucks Hino Motors Toyota Group FAW Group
Group AG 100% Truck Jie Fang
17%
MAZ-MAN Volkswagen
MAZ-MAN Trucks &
(Belarus) 75% 30% Hino
Buses Scania Isuzu
50%
50%
Cummins-Scania 80% Qingling Severtsalauto
Isuzu HICOM
MAN SE MAN Injection Motors Isuzu
(Malaysia) GAZ FAW TRW Fawer
(USA) (China) 6% (Russia) Deutz (Dalian)
100% (Russia) Commercial
Engine
50% 45% Vehicle Steering
(China)
(China)
20% 51% 29%
GM-Isuzu
MAN Force Qingling Commercial 50%
Trucks (India) Isuzu Motors
Motors 51% Truck
Steyr SITRAK CNHTC/
Jinan 75% 80% 45% (Nafta)
Isuzu
Isuzu 9% PT Isuzu
Xian Shaanxi Commercial Ural
50% Qingling Astra Motors GAZ GAZ
Cummins Heavy-duty 25% 35% Truck of America Truck
Automobile Engineering (Indonesia)
(China) (Nafta)
CNHTC Isuzu
Sinotruk Huanghe Philippines
25% Prince Ashok IPC
Leyland 100%
Automotive
Shaanxi Infotronics Smith Electrical
Private Vehicles 35%
(India)
Uralaz
50%
Jinan Huawo Howo
Trucks Ashok
International Hinduja Group Leyland Iveco Larimar
51% Avia
Motors Astra (South Africa)
Mahindra Iveco
Navistar Iveco
Automotives
Ltd
60%
Nissan Ashok
Ashok Leyland Beijing Automotive
Mahindra & Navistar Leyland
Nissan Vehicles 51% 50% Industry Holding
Mahindra International IC Bus Technologies Iveco-AMT
(India) Iveco Iveco Samotlor
49% (India) 66% (Russia) 33%
51% (Russia)
49% 50%
Mahindra 50%
Nissan Ashok
Navistar Leyland
Engines Powertrain
MWM (India) SAIC-Iveco
Comm. Vehicle Magirus Naveco
International Beiqi Foton Foton (China)
Investment 50% Iveco
Motors
Blue Diamand 100% 51% (China)
25% (Nafta) 75%
Jiangling
DAF
Motors Corp. 50% 100% Volvo Group Eicher Motors Fuso KAMAZ
8% Trucks
11% (Russia)
50%
Kenworth Paccar 50%
50% Tata Group
100% Mercedes-Benz 50%
Trucks Vostok Kamaz
VE Commercial (Russia)
Peterbilt Volvo Trucks Vehicles Eicher
UD Trucks 50%
(India)
Tata Tata Motors
Taiyuan Changan
Heavy Truck Co 50%
Karsan Kamaz Vectra Cummins
Motor Kama
51% 50% (Russia)
(India) Tata
Volvo 76%
Cummins
(India)
*Stand 08/2014
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Issued 09/2014