Us Manufacturing Global Truck Study The Truck Industry in Transition PDF
Us Manufacturing Global Truck Study The Truck Industry in Transition PDF
Us Manufacturing Global Truck Study The Truck Industry in Transition PDF
Appendix 38
02
Global Truck Study 2016 |
The truck industry in transition
Summary
Digitalization and weaker growth prospects:
stagnation in the commercial vehicle market
This study predicts a compound annual The study closely examines four global
growth rate of only 0.6% (CAGR1) for the trends that will have a lasting effect on the
global heavy and medium commercial commercial vehicle market. These trends
vehicle markets until 2026. The weak will fundamentally transform global truck
growth prospects for the truck market markets. Established commercial vehicle
are only partially offset by subdued ex- manufacturers will have the opportunity
pectations for global economic growth to actively shape this process, but to do so,
(OECD +3.3% per year until 2026). they must successfully occupy new areas
of business and go beyond being simply
Particularly in the highly developed manufacturers of products to become
commercial markets of the Triad2, hardware manufacturers with a wide
telematics and digitalization in transport range of digital services.
will enable further increases in efficiency,
meaning that fewer commercial vehicles
will be required to transport the same or
even a greater number of goods. Thus, the
Triad markets are expected to shrink slight-
ly at an annual rate of -0.9% from 2016 to
2021. After that, the decline is expected to
accelerate to -1.4% per year until 2026.
1
Compound Annual Growth Rate
2
North America, 28 European countries, developed countries in Asia 03
Global Truck Study 2016 |
The truck industry in transition
Trend 1, Trend 2,
telematics services: urban logistics concepts:
Digitalization will be the biggest driver Increasing urbanization3 is leading to
of change in the truck market. Telematics fundamental changes in supply concepts
systems in trucks will become standard for major urban areas. Experts believe that
in the Triad markets. IT and software solu- light commercial vehicles will be increa-
tions will closely integrate transporters into singly used for last mile distribution in ten
the systems of the Industry 4.0 value chain. years’ time – also to avoid access restric-
Connected devices allow dynamic route tions in urban centers. At the same time,
optimization and ensure better capacity better-controlled networks will bring dis-
utilization. Systems for monitoring an tribution centers and therefore also heavy
individual’s driving style and wear on com- commercial vehicles closer and closer to
ponents save fuel, protect materials, and metropolitan areas. The result will be that
increases a truck’s useful life. The resulting medium-sized trucks will lose a significant
telematics sales will more than triple over share (-2% CAGR by 2026) of freight trans-
the next ten years with 16% annual growth, port in the Triad to light and heavy com-
and therefore grow much more strongly mercial trucks. Globally speaking, the
than sales in the vehicle business. OEMs medium-sized segment will be stagnant
must tap into telematics and IT services by 2026, while MCVs will continue to be in
business to stay profitable in the face of demand, especially in structurally weak re-
declining sales volumes. gions of the RoW and in China. At present,
approximately 60% of all MCVs are used
in the transport segment. The remaining
40% special-purpose vehicles such as fire
trucks, concrete mixers, or sewer cleaner
trucks are excluded from these trends.
Trend 3, Trend 4,
larger fleets and sharing concepts: alternative drive systems:
Rising cost pressure is leading to increased Tighter exhaust gas regulations and access
consolidation within the logistics sector. restrictions for diesel vehicles, especially in
The trend towards larger fleets with more large cities, demand major investment in
than 100 vehicles will continue to increase alternative drive systems 4, while simulta-
until 2026. The number of customers is neously opening up new sales opportuni-
shrinking, while their purchasing power is ties. A market model developed by Deloitte
growing. OEMs need to respond to this, shows that about 13% of new vehicles
for example by expanding their range of (MCV + HCV) in the key German market will
products and services for large customers already have an alternative drive system
and strengthen their direct sales channels. by 2026. In MCVs, there is a trend toward
OEMs must adapt their dealer network plug-in hybrids (67% vehicles will have
accordingly. alternative drive systems vehicles by 2026).
On long distances, nearly 80% of HCVs with
alternative drive systems will be running on
natural gas (LNG + CNG).
3
UN Analysis: nearly 60% of the global population will live in cities in 2026
4
The study evaluates the following alternative drives: PHEV: Plug-in-Hybrid Electric Vehicle, BEV: Battery Electric
Vehicle, LNG/CNG: Liquid/Compressed Natural Gas 04
Global Truck Study 2016 |
The truck industry in transition
The very foundations of the way in which This study addresses the following
goods are transported in the future is set questions:
to change. Let us imagine a world in which
•• Which trends will influence truck sales
trucks are connected and driving semi-
figures, if it will be possible to transport
autonomous. New logistics concepts will
more goods on fewer trucks in the
transform the world of transport. Demand
future?
for fuel is falling and costs per trip are de-
clining. Sophisticated safety systems now •• What new skills will OEMs need to be
allow the vehicles themselves to eliminate able to compete in the commercial
most causes of accidents. vehicle market of the future?
The commercial vehicle industry is already •• What role will alternative drive systems
discussing the opportunities and risks that play for heavy and medium commercial
these new developments open up for the vehicles ten years from now?
sector. OEMs and suppliers are evaluating
The topic of autonomous driving was
the possible direction a future shift in their
deliberately omitted from this study. The
business and the structure of the market
reason for this is that it must be assumed
will take.
that driverless trucks are not expected to
The new developments not only affect the be widely used within the next ten years.
design and function of the truck as a pro- It is true that new assistance systems are
duct but also require greater integration of likely to relieve drivers of individual tasks or
the truck into the entire goods transporta- the entire task of driving on some sections
tion ecosystem. This demands a strategic of the road, but completely doing without
reorientation of the industry. a driver is not anticipated within the time-
frame of this market study.
This study focuses on the main logistics
trends and the implications for the com-
mercial vehicle markets and manufactur-
ers who supply them.
05
Global Truck Study 2016 |
The truck industry in transition
The manufacturers of commercial vehicles The global economy appears to be suffering economic growth. Increases in efficiency
will be operating in dramatically different from increasing exporting fatigue: the global resulting from innovative supply concepts
markets within the next ten years. Where trading volume has fallen at a rate of 2.5% will begin taking effect from 2021 onwards,
global sales performance was once closely CAGR over the past five years. Further, a and demand for commercial vehicles will
tied to economic development and the growth sharp drop was recorded (12.5%) between decline. Deloitte expects negative growth
of the global economy, this connection is 2014 and 2015. Should this trend continue, of 0.1% CAGR between 2021 and 2026. This
rapidly disintegrating5. it is likely to put negative pressure on the translates to annual increase of 0.6% over
demand for transport services and conse- the entire ten-year period.
Growth in the global economy is also quently demand for commercial vehicles.
expected to slow down (GDP +3.3% CAGR
according to the OECD) through to 2026, The commercial vehicle market will pass
and even weaker growth is projected for through two phases over the next ten
the Triad markets. Conversely, other regions years, each with its own dynamics. Annual
and the BRIC countries are projected to growth of 1.3% is expected over the next
grow at an above-average rate6. five years, largely driven by continued
17 15
2.000
15 65% 67%
10 65%
1.500
5
10
1.000
0
-10
0
5
CV sales figures: IHS, Deloitte Analysis; GDP growth: OECD long-term forecast
6
GDP ranking 2015 to 2030: Brazil from place 7 to 6, Russia from 6 to 7, India stays on 3,
China stays on 1, Indonesia from 9 to 5, Turkey from 17 to 14; Source: IMF 06
Global Truck Study 2016 |
The truck industry in transition
The impact of GDP growth and the four Figure 3: Development of regional sales market shares
key trends on commercial vehicle sales Source: IHS, Deloitte Analysis
200 RoW
0
Low impact
2016 GDP Telematics Urban Larger fleets 2026
growth services logistic and sharing
concepts concepts
Figure 4: Impact of GDP growth and the four key trends on commercial vehicle sales (in K units)
Source: IHS, Deloitte Analysis
07
Global Truck Study 2016 |
The truck industry in transition
Telematics services Urban logistics concepts Larger fleets and sharing concepts
Change •• Real-time information about the •• Industry, commerce and end users •• The transport logistics sector con-
condition of the vehicle, traffic, demand increasingly more specific tinues to consolidate, resulting in
loading capacity, condition of cargo, transport solutions. increasingly large fleets.
etc. are used for optimization.
•• More sophisticated ordering •• Increasingly efficient networks thanks
•• The modern truck is integrated into behavior and rising numbers of to optimized routes, less unutilized ca-
the value chain. packages demand new logistics pacity and pooled transport volumes
concepts. increase total capacity.
•• The total cost of ownership is fur-
ther improved through telematics •• Increasing urbanization force •• Truck sharing concepts increase and
solutions: routes are dynamically logistics companies’ to relocate meet peak needs more intelligently
optimized, empty journeys avoid- their distribution centers closer to than existing rental models. Sharing
ed, truck uptime and productivity urban areas. models increase the overall efficiency
is increased. The number of acci- of the transport network.
•• Distribution centers rely on HCVs
dents drops dramatically.
for long haul transport and LCVs
for last mile delivery to the end
customer.
Effects •• The application of telematics solu- •• MCVs will lose transport market •• Owner-driver 7 concepts will not sur-
tions requires a highly developed shares to HCVs and LCVs in the vive the competition.
infrastructure and a premium Triad markets and shrink at 1.8%
•• Continued trend towards consolida-
product; which is why demand is CAGR until 2026.
tion and larger fleets.
concentrated in the Triad markets.
•• In countries with a lack of infra-
•• Rental and sharing concepts are also
•• Telematics solutions will become structure, some regions will con-
an interesting market for non-OEMs.
standard in mature markets within tinue to rely on the MCV segment
the next ten years. (BRIC: +1.5% and RoW: +0.5% •• Percentage of peak needs covered
CAGR). by new sharing and rental concepts
•• The telematics market will grow
will increase in the short term and
by a factor of three in the next ten •• Global sales of MCVs will stagnate.
improve efficiency.
years.
Overall effect These factors will together reduce the growth in the truck market by 15% (approx. 480,000 units, 2016 to 2026)
Alternative drive systems will also gain significance in the commercial vehicle industry over the next ten years and seize market
shares from diesel. Even though this does not have any overall impact on sales figures, a projection of future market shares
can be found in Chapter 4 of this study.
7
Owner-drivers are commercial vehicle owners who are also drivers themselves 08
The trends
in detail
09
Global Truck Study 2016 |
The truck industry in transition
Trend 1:
Telematics services
Digitalization means major improvements in efficiency -
software and apps for commercial vehicles are becoming
a billion-dollar market
Original functionalities for Advanced functionalities for Functionalities for freight, capacity,
the vehicle the driver and their safety ERP operations systems, etc.
Benefit •• Less wear on the vehicle •• Monitoring vital status of the driver •• Integration into production systems
Functions •• Consumption, wear and running •• Driving times •• Customized OEM solutions
with market performance
•• Speed •• Route optimization integrated into
maturity in
•• Real time info on fuel consumption the production system
<5 years •• Working hours
and suggestions for improvement
•• Track and Trace
•• Live warnings for inappropriate
•• Preventive maintenance message
driving style •• Transfer of last mile information to
•• Sending error codes to the repair mobile phones
•• Automatic braking and acceleration
workshop
•• Performance reports for fleet owner
•• Warning of collision
•• Repair workshop finder
•• Load monitoring (real-time freight
•• Vital status of the driver
•• Surrounding conditions data for temperature, location etc.)
•• Accident reports
•• Road map updates •• Electronic toll payment
•• Load description in case of
•• Traffic gridlock assistant •• Platform for new insurance models
accident
based on driving behavior and usage
•• Forward-looking traffic information
•• Automatic accident report /
•• Remote control functions (air-con- emergency call
ditioning, key, horn, warning light)
Market •• Augmented reality with wind- •• Optimized traffic light timing and •• Direct mobile payment
maturity in shield display of routing info traffic flow (communication with
•• Environment and roadway monitoring
> 5 years infrastructure to avoid traffic jams)
•• Tracking of several trucks so as
to drive in convoy / platooning •• Extended help on emergency call
11
Limitation 8%
Driver and safety features Expert view on customer value of the category
driver and safety features
In the drivers and safety category, the
focus lies clearly on monitoring driving
behavior. Combined with information about Driving behavior 77%
the route, it can be seen whether the driver
has taken advantage of all fuel-saving
Workingtime tracking 46%
opportunities and driven the truck with
sufficient care. Both points directly affect
profitability. If deviation in driving behavior Danger warning 31%
are detected, these can be addressed with
targeted trainings.
Emergency services 23%
Nearly half of the fleet managers rated driv-
ing time monitoring as important; one in
three lists danger warnings that can prevent Limitation 8%
accidents and therefore damage and delays
as an important advantage.
0 10 20 30 40 50 60 70 80
12
Workingtime tracking 46%
Global Truck Study 2016 |
The truck industry in transition
The following table shows what is possible with telematics solutions today, and which applica-
tions will be possible in ten years’ time.
8
World Economic Forum: White Paper ”Digital Transformation of Industries”
9
Deloitte expert Interview: “In recent years utilization increased by 3% year-on-year”
10
Auto.de: Article "Tiredness and inattention cause most truck accidents"
11
Federal Motor Carrier Administration: “Study of the Impact of a Telematics System”
12
World Economic Forum: White Paper ”Digital Transformation of Industries”
13
Global Truck Study 2016 |
The truck industry in transition
GPS and dynamic routing can New solutions for logistics companies with
be used to avoid detours and capacity bottlenecks:
empty journeys, and optimize
the utilization of fleets. Ride sharing lets companies share vehicle
Fleet
capacity when they have small loads and
manage-
Optimized routes can save similar routes. Truck sharing can be used for
ment ser-
5% on fuel costs13: short or longer truck rental periods. The ad-
vices and
vantage is that fleet operators are no longer
integrated
For example, a company with forced to buy their own trucks, but can hire
supply
a fleet of more than 1,000 them from an operator for short-term capac-
chain
vehicles was able to quickly ity peaks.
identify free trucks with
the help of idle alerts and Truck and ride sharing help fleet operators
optimally adapt the routes of save the cost of an additional truck as the fee
all vehicles accordingly. This includes the cost of repairs, insurance and
reduced the fuel consump- administration. The renting party only has to
tion by 75 liters/per vehicle/ pay fuel and driver costs.
month, resulting in a saving of
EUR 100,000/ month across Approximately 15% of the truck market will
the entire fleet. be using these sharing platforms by 2026.14
13/14
World Economic Forum: White Paper ”Digital Transformation of Industries”
14
Global Truck Study 2016 |
The truck industry in transition
Sales
in Billion EUR ∑9,9 Billion EUR
10
4
∑2,3 Billion EUR Software
3
2
Hardware
1
0
2016 2018 2020 2022 2024 2026
Figure 12: Global revenue forecast of Telematic services between 2016 – 2026 (Hard- and software)
15
Deloitte Analysis
15
Global Truck Study 2016 |
The truck industry in transition
In the Triad markets, telematics hardware Software services are becoming increas-
is currently installed in every second truck, ingly wide-ranging and powerful, meaning
but software is not widely used at only that a new generation of services about
around 5%. Over the next few years, tele- every five years. One of the new possibilities
matics will become standard equipment in might be the monitoring of the driver’s vital
HCV trucks in the Triad, meaning that nearly signs. This could enable the vehicle to safely
every new truck will be equipped with tele- come to a stop in the event of health prob-
matics by 2026. The market for retrofitting lems, while also sending immediate medical
is disappearing. Penetration will be less pro- assistance to the driver.
nounced outside the Triad and reach only
80% in the MCV area by 2026, as there are Telematics services place heavy demands
fewer applications in this segment. on mobile data networks, which are usually
only met in highly developed infrastructures.
Despite continued improvements in Consequently, Deloitte estimates that the
performance, the cost of built-in hardware Triad markets will generate about 60% of
and software will decline due to the effects telematics revenues in 2026. The fact that
of economies of scale and technological large fleets in particular profit from the
advancements. However, overall sales advantages of telematics is another factor
will increase significantly as a result of in- behind this distribution. These are mainly
creased distribution. found in mature markets.
Software
Figure 13: Market penetration and price forecast of Telematic services (per vehicle in Triads)
Source: Deloitte Analysis
16
Global Truck Study 2016 |
The truck industry in transition
Currently, telematics are more likely to be The idea of ecosystems is therefore of companies. That is why OEMs opening
retrofitted than purchased ex-factory. But central importance: up their own systems plays an important
OEMs are well-positioned and have the role, as then the information gained can
chance to gain the lion’s share of this Monitoring the system environment (also be used for other purposes and applica-
market. At present, all commercial vehicle referred to as an ecosystem16) is a major tions.
manufacturers are expanding their tele- cornerstone for growth and securing rev-
matics offerings. The focus is on obtaining enue potential. OEMs can position them- •• Followers offer only the interfaces, not
vehicle-related data (e.g., operating hours, selves as system providers or as followers: their own ecosystem, since this is not
tank level) and supplying this to the driver. one of their core competences.
•• System providers actively create their
The telematics solutions currently being own platform and are therefore closer
offered by OEMs are based on proprietary to the market of the future. Open eco-
and therefore closed systems. There are systems which offer a broad range of „Ninety percent of experts
standardized interfaces, but these cover
only basic information and fleet manage-
manufacturer-independent telematics
services will play a major role in the
think that the range of
ment services functions. More comprehen- future commercial vehicle industry. The telematics services will
sive interfaces and data are required to
integrate logistics systems and expand
challenge lies in establishing ecosystems
that offer sufficient functional diversity to
be a decisive purchase
the currently limited connectivity. be able to assert themselves against IT criterion in 2026"17
8%
0,7bn
15%
1,2bn 34%
2,6bn
NAFTA
Europe*
Developed Asia**
11%
0,8bn Brasil
Russia
2% India
0,2bn 2% 6% China
0,5bn 21% More
0,2bn 1,7bn
Figure 14: Expected revenue shares of Telematics services per region / country in 2026
Source: Deloitte Analysis
*Europe: European Union as well as Norway, Switzerland, Great Britain
** Developed Asia: Hong Kong, Singapur, Japan, Taiwan, South Korea
16
An ecosystem consists of a platform for securing the connection to the truck and applications (also called "apps")
which ultimately generate the functions and the added value for the customer
17
Deloitte Global Truck Survey
17
Global Truck Study 2016 |
The truck industry in transition
The challenge in the first option lies in through telematics and who controls them status information and combine this with
decoupling new business from the typical is still a big hurdle. Customers will be more logistics processes. This combination inte-
product lifecycle of three or more years willing to surrender their data if they can grates the truck even more deeply into op-
which currently dominates the industry. identify additional value and see benefits erational production and logistics systems.
Evolving into a software provider requires for themselves, for example cheaper insur-
more agile and dynamic behavior. ance policies19. Manufacturers must engage more strongly,
build up corresponding capacities in de-
„Experts think the Companies in the IT sector have also rec- velopment and, in the next three to four
ognized the potential for telematics sales years, bring solutions that offer a complete
customer’s data sover- and are already active in this market today, ecosystem to the market with a truck-as-a-
eignty will be an essential offering a variety of solutions. They have platform approach.
thus become competitors of truck manufac-
dif-ferentiating feature"18 turers and offer extensive fleet and logistics
systems which have direct access to the „Their focus on hardware
OEMs should seek dialogue with the truck’s software via their own interfaces.
fleet operators in order to gain a compet-
and limited IT capabilities
tive advantage with their own telematics It is to be expected that independent ven- for developing telematics
systems. It is necessary to win their trust dors will also bring cross-vendor tele-
and to meet their requirements. The ques- matics services to the market. These offer
services are the biggest
tion of who can use the data obtained brand-independent preparation of truck hurdles for OEMs"18
Scope •• Own eco-system (OEM as owner •• No own eco-system •• Provides OEM-independent eco-system
of the platform) as integrator (also with own hardware)
•• Ensures data transfer to third-party /
•• Open Source with quality control OEM eco-systems and compatibility •• Ensures compatibility with OEMs and
for apps app suppliers
•• Revenue model e.g., via data transfer
•• OEM apps + third-party apps possible •• Revenue model via eco-system /
app commission
•• Possible revenue approaches:
user account / app commission •• Customer installs own hardware in
/ free truck (e.g., DHL)
Inter- •• CAN Bus (focus on own brand) •• FMS+ (manufacturer-independent) •• CAN Bus (limited)
faces
•• FMS+ (manufacturer-indepen- •• FMS+
dent)
18
Deloitte Global Truck Survey
19
More than 30 % of respondents in the Deloitte study "European study on car insurance - digital car insurance and its importance for insurers"
would willingly pass on their data to their insurer; more than 20 % to the car manufacturer.
20
Apps (applications) are programs with specific functions; for example the monitoring of fleets; CAN-Bus: Controller Area Network Bus;
bus for the networking of control devices in automobiles. 18
Global Truck Study 2016 |
The truck industry in transition
Trend 2: Urban
logistics concepts
New concepts require fewer medium
commercial vehicles
Increasing urbanization is fundamentally slots, and delivery drones, will continue to The sub-segment of MCVs equipped with
transforming existing concepts for supply- spread. The dominance of HCVs and the equipment for special applications (sewer
ing urban areas. Distribution centers are decline of MCVs has been observed world- cleaning, garbage disposal, concrete mixers,
being moved ever closer to urban areas. wide since the early 2000s. If there were an etc.) is excluded from the aforementioned
Meanwhile, the growth in online retail has even 50/50 percent split between HCVs and trends. Deloitte currently estimates that
generated double-digit growth rates for MCVs back then, heavy trucks would now this market accounts for 40% of the MCV
parcel service providers in recent years. already account for 65%. This will increase segment.
This trend will continue and lead to new to 67% by 2026. A contrasting development
logistics solutions for urban areas as cus- is emerging in China. Supply to large cities in In general terms, the European transport
tomer demand for faster and more flex- China is increasingly being managed using market is also likely to see increased use
ible deliveries increases. MCVs, both now and in the future, because of rail networks, which will change the in-
HCVs are not allowed to enter metropolitan termodal split to the detriment of the truck.
An unsurprising consequence is that trans- areas during the day. The more favorable environmental bal-
port logistics are changing. Ever larger hubs ance of the railroad is drawing much vol-
are emerging and these are moving closer 100% ume away from the truck to the train. For
to the growing conurbations. Long-distance example, the Gotthard Base Tunnel was
transport between hubs and spokes will 80% opened in2016 to increase freight capaci-
be handled almost exclusively by HCVs in ty on the Rotterdam-Basel-Genoa corri-
future, because HCVs always have lower 60% dor, and to shift freight from the road to
operating costs than MCVs due to lower the rail due to increasing environmental
personnel costs per ton-kilometer. In urban 40% % HCV pollution. Intercontinental train conecions
areas, delivery to the end-customer (the last are also increasing in appeal. In this case,
mile) will be handled by the more agile LCVs. 20% the fre-quency of connections along the
LCVs also have the advantage that they are % MCV nearly 10,000 km long route from China to
not affected by the increasingly stringent 0% Ger-many is currently being increased. At
2000 2006 2011 2016 2021 2026
exhaust gas regulations21 and restrictions 16 days23, it is significantly faster than any
on access to inner cities22 for the last-mile sea-going vessel. The European market is
Figure 16: Global commercial vehicles segment
delivery. Alternative delivery concepts such shares: Decline of MCV share to 33%. regarded as a pioneer in terms of commer-
as packing stations, in-car delivery, set time Source: Deloitte analysis cial vehicle sector trends.
21
On exhaust gas regulation: see green sticker in Germany
22
On access restrictions: see in China and Europe (London) in general; planned in many other metropolitan regions
23
ThyssenKrupp press release: "Test freight train from China arrived in Germany"
19
Global Truck Study 2016 |
The truck industry in transition
Trend 3: Larger
fleets and sharing
concepts
Increasing numbers of major customers demand
new sales models
Share of customer
segment in total sales [%]
100%
25% 30% 35%
75%
16% 15% 13%
50%
24
Dealogic and Deloitte Analysis, as well as article in Centumcapital "Transport and Logistics Industry Consolidates"
25
Deloitte Global Truck Survey 20
Global Truck Study 2016 |
The truck industry in transition
It might appear at first that larger custom- trucks to rent or share, they, too, stand to
ers are gaining negotiating power over benefit from this emerging market. They
OEMs. But the trend also brings new possi- could easily offer such capacities. New tech-
bilities with it: nologies will simplify the billing process and
minimize transaction costs for the comple-
OEMs must switch their focus toward pro- tion of such a rental transaction. Manufac-
viding direct support to major customers turers could also include the glut of used
and integrated multichannel management commercial vehicles in such offers.
in order to deal with the changes in cus-
tomer structure. This, of course, has an Flexible rental models expand OEMs’ ser-
impact on the dealers, who tend to only vice portfolios. “Pay-per-minute” or “book
take care of service where major customers guaranteed capacity” offerings are a step in
are concerned. OEMs must adapt incentive the direction of service-focused suppliers of
systems for dealers accordingly. capacity solutions for OEMs.
26
Deloitte Global Truck Survey
21
Global Truck Study 2016 |
The truck industry in transition
22
Global Truck Study 2016 |
The truck industry in transition
Trend 4: Alternative
drive systems
Savings in operating cost increase the appeal of
alternative drive systems for certain applications
Electromobility is on the rise in the auto- rational and based solely on economic
motive industry. In just the same way, the considerations. Germany, as the largest
commercial vehicle industry is gaining its European truck market, can be regarded
first experience with alternative drive sys- as representative in respect of the pen-
tems. But how far are alternative drive sys- etration of alternative drive systems.
tems from a breakthrough? An important Around 32,500 trucks (roughly 1%) with
distinction to the passenger car market in alternative drive systems were registered
this context is that in the logistics market, in Germany as of January 2016.
purchasing decisions are almost exclusively
1%
Diesel 15,523 with CNG
48%
38%
95%
Figure 18: Number of trucks registered in Germany as of January 1, 2016: total and proportion of alternative drive systems
Source: Deloitte Analysis
23
Global Truck Study 2016 |
The truck industry in transition
Although the transport industry has tra- can reduce the overall cost of the trans- battery technology, operating and acqui-
ditionally drawn a very tight line with its port economy with the help of cheaper sition costs. The results for medium and
budget calculations, investment in alter- fuels. Offering alternative drive systems heavy trucks are considered separately due
native drive systems can yield significant could become an attractive business area. to the vastly different range of applications.
economic benefits. This is in addition to Figure 19 depicts our hypotheses.
the environmental benefits, should fleet Which type of drive will have the greatest
operators demand sustainable, green logis- potential in ten years’ time? To answer this
tics. Alternative drive systems are question for this study, Deloitte researched
also becoming increasingly efficient and and assessed the most important factors:
Operating costs
Medium-sized commercial
vehicles: One fifth of new vehicles
will be powered by hybrid or fully
electric drives by 2026
Between 2016 and 2026, the proportion in 2026. At the same time, the capacity
of alternative drive systems among annual of batteries in relation to their weight will
sales in the MCV segment will increase improve by 70% over the same period.
from about 1% in 2016 to just over 20% in Factors driving the sale of fully electric
2026. Cumulatively, around 14,500 MCVs and hybrid vehicles include more strictly
with alternative drives will be sold between regulated emission and noise limits in
2016 and 2026. urban areas and advancements in battery
technology (better capacity, lower weight,
Hybrid vehicles will gain greater appeal and lower production costs).
will expand their market share from today’s
1% to just under 14% by 2026. The PHEV BEVs (battery electric vehicles) will only as-
(plug-in hybrid) generates the greatest sume a 5% market share by 2026, because
savings potential in distribution, because storage capacities (per kilogram of battery
energy recovery when braking can play weight) are still too low and the additional
a particularly significant role here, where price is too high. Low consumption cannot
there is a greater share of stop-and-go compensate for this. Compared with other
usage scenarios than in long-distance European countries, electricity prices in
transport. Germany are relatively high, which reduces
the advantage of using BEVs.
The costs of batteries for fully electric
trucks will be halved by 2026. This cor-
responds to a reduction from about 220
euros/kWh at present to 104 euros/kWh
BEV
5%
PHEV 14%
0,10%
1%
25
Global Truck Study 2016 |
The truck industry in transition
Sales in units
3.000
BEV
PHEV
LNG 2.306 Units
2.000 CNG
1.000
899 Units
Figure 21: MCV sales with
alternative drivetrains per year
BEV: Battery Electric Vehicle
195 Units PHEV: Plugin-Hybrid Electric Vehicle
LNG & CNG: Liquid & Compressed Natural Gas
0 18 Units
ICE: Internal Combustion Engine
2016 2018 2020 2022 2024 2026 Quelle: Deloitte Analysis
26
Global Truck Study 2016 |
The truck industry in transition
BEV PHEV
1% 1%
LNG
5% CNG
3%
2016
ICE 90% Figure 22: Development of alternate
drivetrain shares at HCV sales in 2026
BEV: Battery Electric Vehicle
PHEV: Plugin-Hybrid Electric Vehicle
BEV PHEV LNG CNG ICE Source: Deloitte Analysis
27
On CNG: Overview commercial vehicles - trucks and buses with CNG and LNG (pdf from www.bdew.de)
On LNG: Documentation to expert workshop on LNG and CNG trucks (pdf from www.bmvi.de)
27
Global Truck Study 2016 |
The truck industry in transition
The continued success of natural gas peak load, although this support is taken
technology critically depends on the ex- advantage of too infrequently in long-dis-
pansion of the supply network, sustained tance transport to justify the additional
energy tax reductions, and on further ad- fixed costs of the second drive train. With
vancements in efficiency, performance, such disadvantages, the market potential
and range. Provided conditions remain remains very low until 2026.
favorable, gas-powered vehicles can be
expected to account for almost 80% of Battery-only electric commercial vehicles
alternative-drive heavy commercial vehi- are not economical in long-distance trans-
cles in Germany by 2026. port, even with advanced battery technolo-
gy. Manufacturers have presented proto-
Hybrid vehicles are an interesting option types, but the batteries used greatly limit
and can generate significant fuel savings the charging capacity and long charging cy-
by supporting an electric motor under cles restrict continuous operation of the HCV.
Sales in units
3.000
BEV 2.829 Units
PHEV
LNG
2.000 CNG
1.767 Units
1.000
655 Units
569 Units Figure 23: HCV sales with
alternative drivetrains per year
BEV: Battery Electric Vehicle
PHEV: Plug-in-Hybrid Electric Vehicle
0 LNG & CNG: Liquid & Compressed Natural Gas
2016 2018 2020 2022 2024 2026 Source: Deloitte Analysis
28
Global Truck Study 2016 |
The truck industry in transition
Market outlook:
Growth in BRIC countries – stagnation in the
Triad markets
The impact of the trends described in Strong 11% is projected for the Russian
this study strongly depends on the spe- truck market, although this is subject to
cific market structures in the respective political and economic conditions. Consist-
regions. A differentiated analysis of the ent growth is anticipated in Brazil, mainly
Triad markets and BRIC countries there- in the HCV segment. By contrast, India’s
fore offers useful insights. growth rates will be much weaker than in
the past few years. The Chinese market
The BRIC countries will develop very dif- is expected to stagnate as overall market
ferently in the period from 2016 to 2026. saturation has been reached.
2016-2026
growth in % (CAGR)
12
Russia
10
6 Brazil
4
India
2
0 China
-2
0 200 400 600 800 1.000
2016 Sold units (K)
BRIC average CAGR 1,6%
Size of circle represents sales in units
Figure 24: Development CAGR (between 2016-2026) and sales in 2026 at BRIC countries
Source: IHS, Deloitte Analysis
29
Global Truck Study 2016 |
The truck industry in transition
28
IHS, Deloitte Analysis
29
European exhaust gas standard
30
Global Truck Study 2016 |
The truck industry in transition
Only a few years ago, Russia seemed to be At the same time, they are also striving to tectionist measures are planned with the in-
on its way to becoming Europe’s largest maintain competitiveness in the global com- tent of protecting domestic manufacturers.
truck market. Instead, political crises and mercial vehicle market. The Euro 5 was in- Nevertheless, it is expected that Chinese
the decline in the price of oil, on which troduced back in 2016, while the introduc- manufacturers, for example, will increase
Russia heavily depends, led to a slump. tion of Euro 6 is planned for 2018. That will their market share from one to five percent.
lead to anticipatory effects in 2017 and a
The Russian market is expected to experi- slump in demand in 2018. No stimulus is expected in the area of al-
ence an economic recovery and growing ternative drive systems. At present, there
demand for trucks, with annual growth The Russian market is expected to be- are no plans for measures modernize of
rates of 11%, between 2016 - 2026. Catch- come more attractive for Asian and Euro- infrastructure that could make it easier to
up effects after years in which sanctions pean manufacturers in the future, and it capitalize on the great potential for natural
and low oil prices led to low economic will also see greater competition. European gas drives in Russia (vast distances, high
growth will ensure significantly stronger manufacturers are concentrating on offer- proportion of HCVs, and easy access to
growth in the period from 2017 to 2020. ing semi-trailer tractor units. However, pro- natural gas).
CV Sales CV Sales
in Russia in Russia
2016 (%) 2026 (%)
30
IHS, Deloitte Analysis
31
Euro 3- and 4- compliant trucks 31
Global Truck Study 2016 |
The truck industry in transition
Significantly lower growth rates have been The transport infrastructure is insufficiently of aging fleets and anticipatory effects.
predicted for the Indian truck market com- developed in comparison to other markets. The Bharat Stage VI emission standard is
pared to past figures. Annual growth of Rugged, simple trucks dominate the road. planned for 2020, which will lead to a rise
3.7% is expected between 2016 and 2021, However, the accumulation of freight via on- in truck prices and shrink the market to a
while diminished growth expected in the line portals will pick up speed and improve low in 2023. After 2024, however, vehicles
period up to 2026 (2.0% CAGR).32 transport efficiency. On the other hand, bought in the middle of the 2010s will re-
there is hesitation in the growth of tele- quire replacement.34 However, implementa-
The Indian market for heavy and medium matics services in the Indian truck market. tion may be delayed if it proves impossible
commercial vehicles is mostly consolidated. The high number of very small transport to guarantee the required high quality of
The three largest manufacturers dominat- companies is ideally suited to the struc- diesel across the country.
ed more than 85% of total sales in 2016. ture of the manufacturing industry, which
However, the high level of consolidation supplies small quantities to many recipi- Further, the countrywide introduction of a
and chances of sufficient profitability offer ents. Telematics services will therefore new system of uniform indirect taxation35
opportunities to new manufacturers. For not be an issue in the next ten years. to replace existing taxation at the borders
this reason, new entrants to the market of the federal states is imminent. That will
are anticipated – first with rental business The state also plays an important role in significantly reduce domestic barriers, dis-
models, and more competition expected the Indian commercial vehicle market. The tinctly increase the competitiveness of fleet
across the board in the long run.33 state-run “Make in India” program, launched operators compared to rail transport, and
in 2014, is designed to support commecial lead to stronger growth in long-distance
vehicle sales and offers companies incen- transport.
Share [%]
tives to produce in India. The aim is to de-
100
velop rural areas and improve infrastruc- Looking at prospects for the Indian mar-
ture, which is expected to lead to increased ket, it can be concluded that premium
28,0
transport needs. manufacturers are unlikely to lose their
75 niche position, owing to the comparatively
Growth will also be positively influenced by underdeveloped infrastructure. Low labor
planned state regulations in the areas of costs and relatively well-trained employees
safety, emissions, and fuel efficiency. In line will see India’s status as an exporter grow
50
52,0 with this, the Indian equivalent to the Euro 4 in the years to come. The country could
standard is planned for introduction in April also be interesting as a production loca-
2017. This will lead to earlier replacement tion for truck manufacturers.
25
10,0
5,5
0 5,0
Market shares
in India 2026 [%]
32
IHS, Deloitte Analysis
Deloitte expert interview
33/34
35
Combining a large part of existing taxes 32
Global Truck Study 2016 |
The truck industry in transition
The Chinese commercial vehicle market will patory effects in the short term, and there-
become saturated in the next few years and after lead to negative sales performance
stagnate by 2026 ( 0.2% p.a.). Slight growth until 2026.
is expected up to 2021, which will turn into
a market decline by 2026. This anticipated Aside from the saturation of the market, the
decline is the result of a reduction in globali- performance of the truck market in China is
zation and world trade.36 also affected by economic policy measures.
The long-term aim is to transform the indus-
The Chinese commercial vehicle market will try so it is less export-driven and more de-
become saturated in the next few years and termined by domestic demand. This will be
stagnate by 2026 ( 0.2% p.a.). Slight growth reflected in reduced economic activity and
is expected up to 2021, which will turn into a corresponding fall in demand for trucks.
a market decline by 2026. This anticipated
decline is the result of a reduction in globa- At the same time, the Chinese transport
lization and world 2026.37 The planned intro- market is currently dominated by micro-
duction of a new exhaust gas regulation, enterprises and characterized by low effi-
scheduled for mid-2018, will lead to antici- ciency and capacity utilization. A consolida-
tion of the market and a condensation to
Units (K) CAGR 0,5% CAGR -0,8% form larger fleets is expected in the longer
term. This in turn leads to greater efficiency
900
and capacity utilization, resulting in lower
781 800 demand for commercial vehicles.
800 770
300
200
0
2016 2021 2026
HCV MCV
36
Deloitte report “State of the Economy”
37
IHS, Deloitte Analysis
33
Global Truck Study 2016 |
The truck industry in transition
Most of the Triad markets are dominated economic crisis, such as Spain, Italy,
by high competitive pressure, a high pro- Ireland, and Greece, thanks to catch-up
portion of large truck fleets, and good road effects. Developments across Eastern
and cellphone infrastructure. This means Europe are heavily dependent on Russia’s
that on the one hand there is a need for performance. Should the political situation
efficiency improvements and on the other stabilize, these markets stand to benefit
also hand the opportunity to achieve these from the expected growth.
with telematics solutions. This will lead to
declining demand for commercial vehicles „Seventy percent of the
in most markets.
experts surveyed expect
The largest market in the Triad, the United a decline in growth rates
States, is projected to experience an annual
decline in sales of 2.1% over the next ten
in the triad markets up
years. Simultaneously, the United States to 2026"39
offers the most diverse range of possible
telematics applications. Contributory fac- In the Asian Triad markets, only Taiwan
tors include the regulatory framework and can benefit from China’s future growth.
the many large fleet networks. Despite ro- Japan on the other hand will experience
bust GDP growth, this will lead to a drop the strongest market decline ( 30%) across
in sales ( 1.5% CAGR) for the NAFTA 38 the Triad is impending, and sales figures
region. The Canadian market is capable of will shrink by 3.5% per year.
maintaining its current volume. Meanwhile,
Mexico is gaining transport volume through Overall economic stagnation, weak consu-
the relocation of production facilities into mer behavior, and a declining propensity to
the country and requires greater transport invest due to the aging population will have
capacities. a significant impact on the commercial ve-
hicle market. This will lead to a market de-
A moderate decline in demand for commer- cline of about 28,500 units in highly devel-
cial vehicles is also expected in European oped countries in Asia until 2026.40
markets, averaging 0.2% per annum until
2026. France owes its stable sales volume
to the great number of large fleets and long
transport distances (large fleet hub). At the
same time, significant growth is expected in
the economies strongly affected by the
38
North American Free Trade Agreement
39
Deloitte Expert Survey 34
40
IHS, Deloitte Analysis
Global Truck Study 2016 |
The truck industry in transition
Growth in % CAGR
Croatia
7
Latvia
6 Estonia
Italy
5
Greece
4
Slovenia
Ireland Mexico
3
Slovakia
2 Spain
Bulgaria Taiwan
1 Hungary Romania
Czech Republic France
0 Belgium Canada Germany
Sweden
-1
South Korea United Kingdom
Netherlands
United States
-2 Austria Poland
-3 Japan
-4 5k 10k 15k 20k 25k 30k 35k 40k 45k 50k 55k 60k 65k 70k 360k
Units sold
Finnland
Switzerland
Lithuania
Singapore
Denmark
Portugal
Norway
Hong Kong
35
Conclusion and
recommendations
36
Global Truck Study 2016 |
The truck industry in transition
Sales stagnating
Innovative service offerings and software solutions
offer new potential
The trends described will transform the not an absolute must, but compatibility with will have a negative impact on truck sales.
truck market and will have different effects market-leading systems must be ensured. To compensate forthis, OEMs can expand
in the world’s different economies. The However, the market for telematics hard- their rental business and profit from the
high-volume Triad markets have reached ware is expected to stagnate at around two new market. Manufacturers could also
high saturation. Combined with increases billion euros as systems become increasing- include the glut of used commercial vehi-
in efficiency as a result of telematics services, ly cost-effective. On the other hand, sales of cles in such offers. Such models could also
this will lead to a decline in sales in these software in the truck market will multiply to be used to underline their position as a
markets. In the BRIC countries, the progres- around 8 billion Euros. To succeed in this service provider.
sive modernization of road networks and field, manufacturers must quickly build up
infrastructure will open new sales potential considerable additional software compe- The significance of alternative drive sys-
through additional telematics services. This tence. If they do not bring new offerings to tems will also increase. Emission, noise,
will supplement commercial vehicle sales, as the market in the next two to three years, and access regulations in developed mar-
is already the case in the Triad. new suppliers could deeper penetrate this kets will accelerate and promote this trend.
market for truck digitalization. The expansion of the OEM product port-
To secure and expand their success in this folio to include alternative drive systems
environment, commercial vehicle manufac- Vehicle manufacturers’ customer structure offers sales opportunities, provided they
turers should take action across four areas. is shifting towards larger customers with take account of the application scenarios
correspondingly increased bargaining po- relevant to distribution and long-distance
As commercial vehicles go digital and be- wer. The owner-driver model will increas- transport.
come connected, growth will slow down ingly disappear, at least in the developed
and sales figured may even decline. Yet markets. However, large customers will in-
these also open up new revenue streams creasingly demand direct sales. Manufac-
if the manufacturers themselves become turers must speak to this need and adapt
active in these fields and expand their their dealer networks accordingly. Dealers
classic hardware business into telema- will only take care of services instead of
tics solutions. sales for large customers in future, for
which OEMs will need to develop suitable
For a ‘basic’ level of this new positioning, it incentive models.
may be sufficient for an OEM to simply inte-
grate telematics systems into the vehicles Sharing concepts are also likely to be-
and provide interfaces to the outside. The come an established part of the logistics
integration of ecosystems and telematics industry, in order to make better use of
services into one’s own product portfolio is capacity. Here, too, increased efficiency
37
Appendix
A Methodology
B Country Overview
38
Global Truck Study 2016 |
The truck industry in transition
A Methodology
The Deloitte Truck Study 2016 offers a per- The Deloitte market model aggregates
spective on future developments in the economic trends and trends specific to the
global commercial vehicle markets and ex- commercial vehicle sector into a prediction
plores the trends and technologies which of future changes in market volume. This
will influence them over the next ten years. model maps the impact of telematics ser-
vices, urban logistics concepts and larger
fleets and sharing concepts on the demand
for commercial vehicles.
The results of this model provided the basis As part of this study, interviews were con-
for discussion in expert interviews and sub- ducted with 50 sector and industry experts,
sequent analyses. as well as market analysts from the various
regions. The study results were also supple-
mented by an expert survey (online).
39
Global Truck Study 2016 |
The truck industry in transition
B Country overview
Belgium Norway
Bulgaria Austria
Denmark Poland
Germany Portugal
Estonia Romania
Finland Slovakia
France Slovenia
Greece Spain
Ireland Sweden
Italy Switzerland
Croatia Czech Republic
Latvia Hungary
Lithuania United Kingdom
Netherlands
Russia
Eastern Europe
Europe
United
States Japan
China
Indiaien ASEAN
Indonesia
South Korea
Central America Ukraine Vietnam
Costa Rica Kazakhstan Thailand
Trinidad & Tob. Malaysia
Belarus
Mexico Taiwan
Uzbekistan
Honduras Philippines
Turkey
Columbia
Venezuela South America
Guatemala Brazil
Panama Uruguay
Nicaragua Argentinien Further
Chile
Pakistan Peru
Paraguay
Bahamas Jamaica
Bolivia
Domi. Rep Australia
El Salvador
Neth. Antiles Cuba
Ecuador
Saudi-Arabia Barbados
Canada Haiti
Bermuda Belize
New Zealand Caribbean
South Africa
Triade:
NAFTA (USA, Canada, Mexico)
EU (European Union)
** Developed Asia: Hong Kong, Singapore, Japan, Taiwan, South Korea
40
Global Truck Study 2016 |
The truck industry in transition
Authors
Dr. Thomas Schiller | Partner
Automotive Sector Lead EMEA | Germany
[email protected]
Experts
Dr. Harald Proff | Partner
Service Line Lead Operations | Germany
[email protected]
The authors would like to thank Nick Drummer, Lukas Teichmann, Jan Gunnar Ukena and
Martin Völkl cordially for their contribution to this study.
41
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