Title: RORO Presented By: Flavio Batista
Key What are the main challenges for What strategies should car makers car makers towards 2030? pursue to take advantage of the shifts in the industry? questions How must the supply chains How do we adapt to this new Evolving the RORO change to meet the developments customer reality? towards 2030? Industry 3
1 The World Economy and Global Automotive Shipments The Roll-On Roll-Off Industry Report Strategic Sourcing Has Given Rise to Port Proliferation and 2 Regional Customization 3 A Fleet Under Pressure Disruptive Change and Preparing for the Future 4 4
The world economy has begun to decelerate in 2019 World economic growth rates (GDP) %, 2018-2026 Comments The global risks are rising are increasing. • Unemployment is approaching historical lows across markets; wage growth is improving • The strong dollar will remain in effect as US monetary policy tightens and trade disputes accelerate the flight to safety • Manufacturing growth will decelerate as global growth weakens • PMI indicates weaker growth • Levels of debt approaching the breaking point • Inflationary pressure remains within global central bank targets, easing cycle ending • The consumer outlook is slowing; trade pressures are weighing on growth Source: IHS Markit, IMF 5
Automotive Deepsea Volumes Will Experience Modest Growth Global LV sales expected to see a CAGR of 1.9% Deepsea LV volumes expected to see a CAGR of 2.3% Million units, per sales region, 2018-2026 Million units, 2018-2026 Imported 17.471 Domestic Global auto market growth CAGR +1.91% 2018-2025 510 108.9 -0.7% +1.92% 17.5 94.8 422 93.7 93.0 15.5 15.0 15.2 AS-NA,18-25; Export decrease 551 Japan (-263k) S Korea (-23k) India (-66k) New volume 493 China (+108k) +1.90% 91.4 196 78.6 79.3 77.8 181 15.008 131 128 240 82 62 52 AS-NA NA-AS AS-AF EU-NA SA-NA AS-SA NA-EU EU-ME AS-EU AS-ME Others #N/A 2026 2018 2018 2019 2020 2021 2022 2023 2024 2025 2026 Forecast Source: IHS Markit / GMI 6
Market Snapshot - RORO Top 3 biggest milestones in 2019 Top 3 challenges om 2020 Top 3 biggest opportunities in 2020 ○ Kept volume at around 17M ○ New regulations – IMO2020 – ○ Short Sea Mexico/USA 2050 Zero Emission ○ Ford announced will stop selling ○ Growing presence of startup Car ○ Segment Diversification within sedans in the US market except for companies (ex. Rivian) the Mustang (SUV market) Ports ○ Digitalization – Cars, Terminals, ○ IMO 2020 - VLSF ○ Port Fragmentation ships 7
1 The World Economy and Global Automotive Shipments The Roll-On Roll-Off Industry Report Strategic Sourcing Has Given Rise to Port Proliferation and 2 Regional Customization 3 A Fleet Under Pressure Disruptive Change and Preparing for the Future 4 8
Key Trends – Automotive shipments In 1990, 5 countries contributed to 80% of the world production In 2020, manufacturing is more fragmented, with 12 countries contributing to the same 80% The main manufacturing countries in 1990... The main manufacturing countries in 2020... Share of global production, aggregate share, in %, 1990 Share of global production, aggregate share, in %, 2020 % of total Aggregate share, % % of total Aggregate share, % 32 100 32 100 30 30 90 90 90% 28 90% 28 26 26 Aggregate share 80 80 80% 80% 24 Share of total 24 70 70 22 22 20 20 60 60 18 18 16 50 16 50 14 14 40 40 12 12 10 10 30 30 8 8 20 20 6 6 4 4 10 10 2 2 0 0 0 0 Japan United States Germany France Italy United Kingdom South Korea Spain Russia Canada China Belgium South Africa Thailand India Turkey Indonesia Malaysia Mexico Brazil Iran Poland Czech Republic Romania Hungary Slovakia Argentina Other smaller China United States Japan Germany India Mexico South Korea Spain Brazil Thailand Canada Russia France United Kingdom Iran Unknown Turkey Indonesia Czech Republic Slovakia Poland Italy Argentina South Africa Malaysia Hungary Romania Morocco Other smaller Source: IHS Markit / GMI 9
Flexible manufacturing, cars get less components and final assembly can be done anywhere EVs contains significant less parts than conventional vehicles A few experiments in tooling, prototyping 3D printing allows Porsche • to create obscure parts for Less parts in electric vehicles compared to Classic cars – Feb18 Ford produces the largest vehicles with conventional combustion engine ever 3D printed metal reducing the need for complex production automotive – Feb19 facilities, send as SKD Volkswagen opens advanced 3D printing • center – Jan19 OEMs do already today use flexible platforms PSA Group puts 3D printing to use for cars chassis – Jan18 in production • When cars get selfdriving customers will have A radical rethink – Divergent- hope to change the paradigm even higher desire for quality in production from monolithic, billion dollar factories to networks of • smaller, 3D printing-driven plants : 3D printing allow manufacturers to produce at the local markets. • Manufacturers have to balance benefits of scale vs transportation. 3D print might be more relevant for particular parts the last 2% adjustments to the car • Hard to compete with efficiency at automotive manufacturers plants Source: GMI 10
The complexity is driving increased post-production Port processing o Strengthen end-to-end coordination and visibility with one single point of responsibility o Manage time, quality and lead time to strengthen supply chain performance & optimize cost o Homologation efficiencies where factories are not able to make market-specific changes to base products o Ensure consistent quality to the dealers with less unprofitable time spent in their shop 11
1 The World Economy and Global Automotive Shipments The Roll-On Roll-Off Industry Report Strategic Sourcing Has Given Rise to Port Proliferation and 2 Regional Customization 3 A Fleet Under Pressure Disruptive Change and Preparing for the Future 4 12
Current markets do not justify new ordering activity (Q3 2019 report) Car Carrier Fleet Orderbook Fleet and demand growth # vessels equal or above 4000 CEU Percent Growth y-o-y 14 6 4% 3% 2% 6 1% 0% -1% 2 2018 2019 2020 2021 Demand growth Net fleet growth Order book 2019 2020 2021 • Deep-sea shipments forecasted to increase with about 2% per year • No new orders were confirmed in the quarter* • Marginal net fleet growth (if any) expected for several years • One vessel was delivered, one vessel recycled in the quarter Source: Clarksons Platou *for vessels above 4000 CEU 13
1 The World Economy and Global Automotive Shipments The Roll-On Roll-Off Industry Report Strategic Sourcing Has Given Rise to Port Proliferation and 2 Regional Customization 3 A Fleet Under Pressure Disruptive Change and Preparing for the Future 4 14
The traditional auto business model will be disrupted -more risk in the medium/long term than it has ever been Bloomberg NEF and Bank of America 1) Transportation is costly and inefficient , making the sector ready for disruption. Clean disruption of Energy 2) In cities 40% of car trips are less than two miles (20 minutes bike ride). and Transportation (Tony 3) On average cars idle 95% of the time. Seba): Within 10 years of the regulatory 4) Sharing will disrupt the transportation industry . approval of driverless vehicles, 95 percent of U.S. passenger miles 5) Auto manufacturers fighting to take a share of this part of the industry (GM and JLR investing in Lyft). travelled will be served by on- demand, autonomous electric vehicles owned by companies providing Transport as a Service, which we call TaaS. – The Collapse of the ICE vehicle and Oil industries. Source: Bloomberg NEF, Tony Seba 15
Our industry is changing – disruptive changes ahead Flexible manufacturing Autonomy Mobility models Electrification New entrants • • • New routines handling New customers Changing operational • Less finished units to be • cargo (operational, risk) processes Parts suppliers more • Impact on car sales transported deep sea important • • New players Maintaince of vehicles • Enter new segments • More larger parts like • Old OEMs only hardware • • like: Longer term, significant New manufacturing batteries and frame to provider locations changes in the market • be moved After-sales services / • size possible (up or New customers • maintaince El. a catalyst for other down) trends • Fleet management Source: GMI 16
Electrification in the left lane for the auto industry -rollout is very much a political and regional issue Comments on electrification of LVs • All global auto manufactures realize the need for being present in the EV segment after Dieselgate • smaller OEMs like JLR and Mazda • “pro - fuel cell” Toyota • «Low end» brands like Skoda • Sports car producer Porsche (Taycan) • Hybrids only for a middle stage • UK and France to forbid conventional combustion engines from 2040 • China’s New Energy Vehicles (NEV) policies foster EV growth by domestic players. China also plan to ban conventional combustion engines • China could become a production hub for electric vehicles, with significant export Source: EV Volumes, Bloomberg 18
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