Global Economic Growth Ppt TE by zzq15271

VIEWS: 78 PAGES: 42

Global Economic Growth Ppt document sample

More Info
									                      TE

                            EC


                                  MA
                       CH

                               O


                                     RK
                                      NO
                         NI




                                       ET
                                        MI
                           CA
                                              Management




                                          C
           ANALYSIS




                              L
                                              DECISIONS



                Robert Eller Associates LLC
       CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES



      EFFECTS OF GLOBAL ECONOMIC
     CONDITIONS ON AUTOMOTIVE TPOs

PRESENTED BY:                                      PREPARED FOR:
Bob Eller
                                                   SPE TPO 2009
Robert Eller Associates LLC
                                                   Detroit, MI
Phone: 330-670-9566
E-mail: bobeller@robertellerassoc.com              October 6, 2009
                                                   mydox/papers/SPE TPO 09 ppt.ppt
www.robertellerassoc.com
                                                                                     1
      PRESENTATION OUTLINE


• Global Macroeconomic Situation

• Automotive Market Impacts

• Fuel Price/Environmental/Demographic
  Effects

• TPO Materials/Fabrication Technology
  Responses and Growth Applications

• Future Vision/Summary

                                         2
MACROECONOMIC IMPACTS ON GLOBAL MARKETS



 • Global GDP slowdown – 2-year trough in West
 • Wage deflation/high unemployment (Europe/U.S.)
 • Credit lockdown (despite U.S. stimulus):
   - erosion of consumer purchasing power
   - lending re-starting slowly, under difficult terms




                                                         3
                                    GLOBAL ECONOMIC GROWTH: 2 YEAR TROUGH
                         9

                         8           ADV. ECON.
                                     EMERG. ECON.
ANN. % CHANGE (AT PPP)




                         7           WORLD

                         6

                         5

                         4

                         3

                         2

                         1

                         0
                             2000   2001   2002   2003   2004        2005          2006       2007   2008   2009   2010
                                                              SOURCE: IMF
                                                          b/mydox/rapra 2008/rapra 2008.xls



                                                                                                                          4
  MACROECONOMIC IMPACTS: CHINA/INDIA


• Slowed, but continued high growth
• Shift to domestic markets:
  - supported by strong exports to the West
  - impacted by recession conditions in West

• Will previous rush to invest in China/India pay
  off for auto suppliers?
• Can Western transplant auto suppliers shift
  target to domestic (China/India) customers?
• Ability to compete with domestic (China/India)
  suppliers?
                                                    5
MACROECONOMIC IMPACTS ON AUTO MARKETS


 • Petrodollar export/oil consumption:
    - terrorism
    - economic impacts
    - environmental impacts
 • Responses:
    - alternative energy investments
      (battery/electric drive programs)
    - U.S. CAFE rise
    - CO2 legislation (Europe)
 • Substantial auto OEM/supplier overcapacity in
   West
                                                   6
            U.S. CAFE SHIFT: MINIMAL
      (FLEET MIX & MATERIALS IMPLICATIONS)
           AVERAGE FLEET FUEL ECONOMY BY GLOBAL REGION

      60
           HIGHER CAFE DRIVES PLASTICS
               & TPO SUBSTITUTION
      50

      40
MPG




      30
                                                                                     JAPAN
      20
                                                                                     EU

                      U.S. CAFE LAG                                                  CHINA
      10
                       CONTINUES
                                                                                     US

       0
             2002        2006                        2010                     2014        2020

                        SOURCE: PEW CENTER, 2008
                          b /myd o x/Fuel/Avg Fleet Fuel Eco no my 0 8 .xls                      7
MACROECONOMIC IMPACTS ON AUTO MARKETS

 • Cash for Clunkers vehicle demand effects:
   - stimulated 2009 vehicle demand
   - 2010 Clunker hangover?
      Can your liquidity and working capital
        sustain 2010 sluggish recovery?
 • N. American auto market share shift to Asian/
   European OEMs continues; supply chain follows
            Your competitive position?
            Which Tier 1s will survive?
 • Fleet composition shift to smaller vehicles
     Is your materials/fabrication technology
    suitable for smaller vehicle components?       8
SUPPLY CHAIN WINNER CHARACTERISTICS


• Lean path to market
• Favorable (global) raw materials technology/
  purchasing position
• Critical mass/global marketing reach?
• Advanced fabrication technologies
• Efficient parts consolidation technologies
• Liquidity position
• Viable position in consolidated supply chain

                                                 9
                                              GLOBAL VEHICLE SALES OUTLOOK
                          90
                                                    42% in 15 emerging markets; 58% in Europe/U.S./Japan
                          80
                                  Annual Growth
                                 1990-2000 2.4%
                          70
                                 2000-2005 3.6%
VEHICLE SALES, MM UNITS




                                 2005-2015 1.3%
                          60
                                                                                                                          2015:
                                                                                                                2009:
                                                                                                                           77%
                          50
                                                                                                             9% DECLINE
                                                                                                            FOLLOWED BY
                          40                                                                                RECOVERY IN
                                                                                    2000:                     2010/2011
                                                                                     57
                          30

                          20

                          10

                          0
                               1975   1980   1985     1990          1995           2000           2005         2010       2015
                                              SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
                                                    r/mydox/Auto Industry/Global Ind Volume TW 081209.xls
                                                                                                                                  10
                                               U.S. AND EUROPE LIGHT VEHICLE SALES
                  20

                  18
SALES, MM UNITS




                  16

                  14

                  12

                  10

                                                                                                                                         U.S.
                   8
                                                                                                                                         EUROPE

                   6
                   70

                         72

                               74

                                     76

                                           78

                                                 80

                                                       82

                                                             84

                                                                   86

                                                                          88

                                                                                   90

                                                                                             92

                                                                                                       94

                                                                                                                 96

                                                                                                                       98

                                                                                                                             00

                                                                                                                                   02

                                                                                                                                         04

                                                                                                                                               06

                                                                                                                                                     08

                                                                                                                                                           10
              19

                        19

                              19

                                    19

                                          19

                                                19

                                                      19

                                                            19

                                                                  19

                                                                        19

                                                                                19

                                                                                          19

                                                                                                    19

                                                                                                                19

                                                                                                                      19

                                                                                                                            20

                                                                                                                                  20

                                                                                                                                        20

                                                                                                                                              20

                                                                                                                                                    20

                                                                                                                                                          20
                                                            SOURCE: DEUTSCHE BANK, 2009
                                                                   B/mydox/auto industry/NA and EUR sales.xls




                                                                                                                                                                11
                                             U.S. MARKET SHARE BY OEM
                  35%
                                                                                                             GM                FORD
                                                                                                             CHRYSLER          TOYOTA
                  30%                                                                                        HONDA             NISSAN
                                                                                                             HYUN/KIA

                  25%
MARKET SHARE, %




                  20%


                  15%


                  10%


                  5%


                  0%
                        1999   2000   2001    2002     2003                2004                2005   2006    2007      2008          2009

                                SOURCES: MOTOR INTELLIGENCE; ROBERT ELLER ASSOCIATES LLC, 2009
                                                      B/mydox/auto industry/US mkt share by OEM.xls




                                                                                                                                             12
          THE AUTOMOTIVE MARKET


Wilbur Ross’ Predictions for (’08/’09) On Target –
• 2009 N. American production decline to < 9MM
• U.S. highly saturated: replacement market, little
  growth potential
• Unemployment: ~ 10%
• U.S. median per capita income: stalled at ~ $45K
• Housing foreclosures
• Net worth decline

                                                      13
  AUTOMOTIVE MARKET: NEXT 10 YEARS



• U.S./Europe driving age population 496MM:
  - 1/2 the number in China
  - 2/3 size of the same population in India
• High demographic/middle class growth rates in
  China/India
• Auto industry growth/volume will benefit China/India
• Regional market shift accelerating


                                                    14
GLOBAL REGION MARKET SHIFT UNDER WAY

        LOCATION               2009 YTD SALES
                              GROWTH/DECLINE
                                     -18%
         Europe     *
                                     -26%
        N. America      *
                                     -21%
          Japan   *
           Brazil                    + 5%
           India                     + 5%
           China                     +42%

    * = Mature markets represent about 60% of global sales

    Source: Robert Eller Associates LLC, 2009
                                                             15
AUTOMOTIVE MARKET: FUEL PRICE EFFECTS

• Fuel price tipping points:
  - shifts in vehicle preference
  - 2008:$3.50-4.00/gal. 100BN fewer miles driven
    (U.S.)
• Likely fuel price rise?   Changes auto and
  autoplastics paradigms:
  - rising oil demand/decreasing production?
  - easy-to-get oil has gotten harder to find
  - economic recovery
  - global population jump by 1.0BN in next 12 years
  - “middle class” increase by 1.8BN (600MM in China)
  - gas taxes in U.S. (remain constant at 0.18/gal.?)
  - diesel pricing policy
                                                        16
     THE OIL PRICE ROLLER COASTER


 Have the 2008 fuel
 price spike and
 tipping point
 permanently shifted:
• fleet composition
• lightweighting
  incentives
• Break-even volumes


                        Source: Foreign Affairs, Sept./Oct. 2009
                                                                   17
AUTOMOTIVE MARKET: FUEL PRICE EFFECTS
 • Plug-in hybrids: bridge to a (composite intensive)
   electric car/alternative propulsion world
 • Diesel future: still uncertain
 • Global Li-ion auto battery sales:
   - $12BN in 2010
   - $35BN in 2015
 • Fuel price increases/environmental legislation
   increases:
   - emphasis on light weight solutions
   - $/kg saved increases
   - TPO demand via new applications
   Are you positioned for new opportunities?            18
                                      U.S. HYBRID VEHICLE DEMAND vs. FUEL PRICES
                        400                                                                                                             4.5
                                     HYBRID VEHICLE SALES
                        350                                                                                                             4
                                     US GAS PRICES
HYBRID VEHICLE SALES,




                                                                                                                                        3.5




                                                                                                                                              US GASOLINE PRICES
                        300
                                                                                                                                        3




                                                                                                                                                  (AVG. $/GAL)
                        250
       K UNITS




                                                                                                                                        2.5
                        200
                                                                                                                                        2
                        150
                                                                                                                                        1.5
                        100
                                                                                                                                        1
                        50                                                                                                              0.5

                          0                                                                                                             0
                              2000   2001    2002    2003          2004                2005                 2006   2007   2008   2009

                                            SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
                                                       b/mydox/auto industry/hybrid and electric cars.xls




                                                                                                                                                    19
                       CURRENT AND FORECAST HYBRID AND ELECTRIC VEHICLE
                                  SALES - N. AMERICA, 2006-2015
                2.0
                             ELECTRIC
                             PLUG-IN HYBRID
                1.5
M M VEH ICLES




                             MILD HYBRID
                             FULL HYBRID
                1.0


                0.5


                0.0
                      2006     2007    2008   2009              2010                 2011           2012   2013   2014   2015

                                 SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
                                               b/mydox/auto industry/hybrid and electric cars.xls




                                                                                                                            20
     POST-RECESSION PARADIGM SHIFT


• Restructured OEM market shares (esp. N. America)
• Restructured autoplastic supply chain
  - emphasis on leaner manufacturing
  - shorter path to market
  - narrowed supplier selection
• Shifted vehicle sourcing towards OEMs with smaller,
  fuel efficient vehicles

          Have you shifted your business
               planning paradigm?

                                                   21
             AUTO TPO DEMAND

• TPO fabrication economics substantially
  improved last 5 years
• Auto TPO demand (N. America): severe 2009
  decline, recovery by 2012-2015
• New applications (despite small-vehicle share
  gain) increased kg/vehicle
• TPO demand shares:
  - Exterior fascia/cladding: major share, mature
  - Exterior panels: growth target (material
     innovations)
  - Interior: process innovation opportunity
                                                    22
        AUTO TPO DEMAND: N. AMERICA

YEAR    VEHICLE        AUTO TPO        NOTE
        PROD’N.,        DEMAND
        MM UNITS
                    MM LBS.      kT
2007       15.3        500       227
2009       8.8         300       136   - Continued OEM share shift
                                       - Depressed market
2015       15.0       550?      250? - Vehicle fleet shift to smaller
                                       vehicles
                                     - Increased TPO penetration in
                                       exteriors/thermoset
                                       competition?
                                     - TPO synergy from LGF-PP
                                       compounds
                                     - Interiors penetration
                                       continues

Source: Robert Eller Associates LLC, 2009                               23
   GLOBAL RECESSION DRIVERS FOR AUTO TPO
                                                               GLOBAL RECESSION DRIVERS FOR AUTO TPO

                                                               AUTO SALES DECLINE, SLUGGISH RECOVERY


         OEM MARKET SHARE SHIFT                                                                      SUPPLY CHAIN CONSOLIDATION, REORGANIZATION


                                                                                  SHIFT OF TECHNICAL CHOICES


                          AVOID CAPEX                                                      LEAN SUPPLY CHAIN CHOICES (REDUCE UNIT OPERATIONS)



MAXIMIZE EXISTING TECHNOLOGY



                                                                                                              - DIRECT COMPOUNDING(a)
               IN-MOLD DECORATION
                                                                                                              - 2-SHOT MOLDING
               SURFACING METHODS
                                                                                                              - IN-MOLD FOAMING


NOTE: (a) DIRECT COMPOUNDING = D-LFT, AT-PRESS FILLER ADDITION, ETC.

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009                                                                                                         24
r/mydox/auto industry/AutoTPO Glob RecDrivers09.vsd // lg/myfiles/visio/Auto TPO Glob RecDrivers09.vsd
 ENERGY/ENVIRONMENTAL DRIVERS FOR AUTO TPO
                                                 ENERGY/ENVIRONMENTAL DRIVERS FOR AUTO TPO

                         - FUEL EFFICIENCY                                                                    FUEL PRICE INCREASE
                         - CO2 DISCHARGE LEGISLATION                                                           (DEMAND, TAXATION)


                                          - ELECTRIC DRIVE                                                 GLOBAL FLEET COMPOSITION
                                          - HYBRIDS                                                        SHIFT TO SMALLER VEHICLES




                                 INCREASED VALUE FOR                                                         INCREASED VALUE FOR
                                LIGHTWEIGHT SOLUTIONS                                                      PERCEIVED INTERIOR LUXURY



 BATTERY-                                                                                                  IMPROVED ENERGY    SOFT TOUCH VIA
                                          LGF-PP BODY                                 TPO OUTER
  RELATED                                                                                                     ABSORBERS          SEVERAL
                                           STRUCTURE                                    SKINS
SUBSTITUTES                                                                                                 (CARBON FIBER?)   TECHNOLOGIES



                                       NEW THERMOSET CONTENDERS?

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009                                                                                                25
r/mydox/auto industry/AutoTPO EnergyEnvDrivers09.vsd // lg/myfiles/visio/Auto TPO EnergyEnvDrivers09.vsd
EMERGING MARKET SHIFTS FOR AUTO TPO

                   EMERGING MARKET SHIFTS FOR AUTO TPO




   EMERGING MIDDLE CLASS                                  ECONOMICALLY TRAILING CLASS




                                                           - LOW COST VEHICLE DESIGNS
                                                           - 2-WHEELERS




         TPO DEMAND SHIFT TO                                    THERMOFORMED TPO
          EMERGING REGIONS                                    SHEET, LOW COST TOOLING




   SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
   r/mydox/auto industry/AutoTPO EmergingMktShifts09.vsd // lg/myfiles/visio/AutoTPO EmergingMktShifts09.vsd   26
MAJOR FACTORS AFFECTING AUTO TPO DEMAND

         FUEL PRICES,                                         FLEET SHIFT TO       GLOBAL MARKET
        CO2 LEGISLATION                                      SMALLER VEHICLES          SHIFT



          LIGHT WEIGHT                                           LUXURY




                                                   AUTO TPO OPPORTUNITIES:

                                                    SOFT TOUCH, SMALLER         - MARKET SHIFT TO
 MULTIPLE APPLICATIONS;
                                                    PARTS, SURFACE DECO-          CHINA/INDIA
 COMPLEMENT LGF-PP
                                                    RATION COST SAVE            - THERMOFORMED SHEET




SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009
r/mydox/auto industry/AutoTPO FactorsAffectingDemand09.vsd
lg/myfiles/visio/AutoTPO FactorsAffectingDemand09.vsd
                                                                                                   27
TPO EMERGING FROM HIGH AUTO CONCENTRATION?

    AUTO TPO COMPOUND TECHNOLOGIES




         NEW NON-AUTO MARKETS,
       e.g., BUILDING/CONSTRUCTION
                                        28
   AUTO TPO SUPPLY CHAIN SHIFTING


• Resin supplier share gain (reactor TPOs,
  captive compounding)
• Regional resin production shift (to petroleum-
  rich regions)
• Lean (direct) fabrication technologies
• Direct compounding
• Non-domestic OEMs importing suppliers (to
  U.S., Mexico)
• Supplier shifts to low cost regions
                                                   29
TPOs AND FIBER-REINFORCED PLASTICS

• Fiber-reinforced plastics (esp. long-glass
  reinforced PP [LGF-PP]) will increase share and
  be among the drivers for TPO demand for:
  - hatchback doors
  - front end modules
  - under body shields
  - door hardware modules
• LGF-PP structural inner panel/micro talc-TPO
  exterior skin (e.g., Ford Kuga)
• Movement into monocoque construction
  (thermoset competition?)
                                                    30
             HATCHBACK DOOR:
         GROWTH APPLICATION FOR TPOs




Vehicle:                     Ford Kuga (2010)
Application:                 Roof spoiler, tailgate outer panel
Grade:                       LyondellBasell Hifax TRC 280X
Molder:                      Plastal
REA Notes:
- Inner panel is LGF-PP compound
   (Stamax from SABIC)
- Design transfer to U.S. (2010)
Photo: Robert Eller Associates LLC
r/myd ox/p apers/spetpo 2009pix.pp t                              31
     HATCHBACK DOOR INNER:
  GROWTH APPLICATION FOR LGF-PP




Part:       Hatchback door inner panel
Material:   40% LGF-PP
Status:     Prototype
Molder:     Plastal
Process:    D-LFT (injection)
Equipment: Krauss Maffei
Note: Competes with LGF-PP compound
Photo: Krauss Maffei
r/myd ox/p apers/spetpo2009pix.pp t      32
MERCEDES SMART FORTWO TAILGATE: PRECURSOR FOR
      LGF-PP AND TPO IN BODY STRUCTURES?



                                          •   20% stiffness increase
                                              vs. earlier version
                                          •   LGF-PP move into body
                                              structures
                                          •   Early use of E-LF-PP
                                              (endless long fiber
                                              polypropylene)
                                          •   Mineral-filled TPO
                                              exterior skin


   •   E-LF-PP gives high load bearing and impact absorbency
   •   Translation potential for rear seat backrest
   Source: Weber Automotive; ESORO AG
                                                                       33
DESIGN CONCEPT FOR E-LGF-PP BASED
  COMPACT CAR BODY STRUCTURE

                                             Thermoset
                                             competition?




         Metallic front and   Double shell
           rear elements        floor



Source: Weber Automotive; ESORO AG

                                                            34
EXAMPLE OF LGF-PP & E-LF-PP DIRECT PROCESS




  Source: Robert Eller Associates LLC, 2009




                                              35
    2-SHOT MOLDING AND SOFT TOUCH

• 2-shot molding:
  - established in consumer/health care
  - widely used in auto (lighting, lenses, multi-color)
  - auto soft touch starting
• 2-shot/TPO growth resulting from:
  - high flow grades
  - 3 layers (skin/foam/substrate) in 2 shots
• In-mold forming of TPO skin/back injection
  gaining share in capex constrained economy


                                                      36
      SOFT TOUCH REINFORCED TPO


• Small vehicle share increase:
  - drives towards higher quality interiors
  - without high cost of multi-step processes
  - new generation of glass fiber reinforced, MIC
    TPOs with soft touch surface for interiors:
     -- improved scratch and mar
     -- low knit line visibility
     -- low gloss
     -- compete with soft touch paints/
         thermoformed or slush molded skins
                                                    37
RENEWED EMPHASIS ON PAINT COST REDUCTION

       Adpro elimination . . . Are we finally there?
   Basis:
   - Part size: 8 ft2/part
   - Cost/gal. for base coat, clear coat, and PC-25 are equal
   - Equal cost for labor to apply each coat

               Adpro + SB     Adpro               SWT-PC- SWT-PC-
               Treatment + SB Treatment + SB      25 + Clear 25
               Base Coat + SB Base Coat           Coat
               Clear Coat
Total Cost:         5.39              3.00            4.76                    2.38
$/Part


 Notes:
 SB – solvent based
 Gallon – US gallon
Source: SWT Group                                         r/mydox/SWT/paint cost reduc.ppt   38
RENEWED EMPHASIS ON PAINT COST REDUCTION


                                       Adpro   Base    Clear           PC-25
                                               Coat    Coat
Inputs      Solids, %                   10      35      35                  35
            Dry film thickness, mils    0.3     1.3     1.3                1.3
            Transfer efficiency, %      60      70      70                  70
            Cost: Coating + Labor,      25      90      90                  90
            $/ gallon
                           2
Outputs Coverage, ft. / gal.           320.8   302.3   302.3            302.3
            Gallon/part                0.025   0.026   0.026            0.026
            Cost: $/part               0.62    2.38    2.38              2.38


Source: SWT Group                                        r/mydox/SWT/paint cost reduc.ppt



                                                                                     39
                    AUTO TPO LIFE CYCLE POSITIONS

                                                                      AIRBAG DOORS
                          FIBER REINFORCED SOFT TOUCH
                 HIGH


                                  EXTERIOR BODY PANELS
                                                                                                                     THERMOFORMED
                                                                                                                       IP SKINS(b)


                          BODY STRUCTURES(a)
RELATIVE VALUE




                                                                                                                    THERMOFORMED DOOR
                                                                                                                        TRIM SKINS(B)
                 MEDIUM
                                                               IP SUBSTRATE
                              2-SHOT SKIN/FOAM/SUBSTRATE




                                                                                                                                       BUMPER
                                                                                                                                       FASCIA
                 LOW




                                                                                                                       CLADDING


                               ADV. R/D; INTRODUCTION            GROWTH                                                   MATURE
                                                           LIFE CYCLE POSITION
                   = ESTIMATED FUTURE DIRECTION
 NOTES: (a) LGF-PP = LONG GLASS FIBER PP; E-LF-PP = ENDLESS     (b) INCLUDES THIN PP (TPO) FILM TECHNOLOGY
            (E.G., TAPE REINFORCED) LONG FIBER PP                   INTRODUCED IN EUROPE (BY JCI, OTHERS)

 SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009                                     r/mydox/papers/Auto TPO Life Cycle 09.vsd // lg/myfiles/visio/Auto TPO Life Cycle 09.vsd
                                                                                                                                                                          40
         FUTURE VISION/SUMMARY


• Global vehicle sales recovering slowly:
  - much faster in China/India
  - future volume shares shifting toward Asia

• TPO supply chain restructuring

• Supplier reduction programs continue,
  e.g., Ford’s Aligned Business Framework (ABF)




                                                  41
        FUTURE VISION/SUMMARY (Cont’d.)


• TPO demand affected by:
  - shift to smaller vehicles, hybrids, electric vehicles
  - likely fuel price increases
  - CO2 and CAFE legislation
  - increased value for lightweighting
  - new generation of TPO applications
  - synergy with fiber reinforced PP
  - new opportunities from micro-talc compounds

• Approaches to reducing/eliminating surface coating
  costs continue to gain share

                                                        42

								
To top