Emerging Countries and Manufacturing IT Solutions Will Shape the Automotive Industry Landscape
Content
Emerging Countries and Manufacturing IT Solutions Shape the Automotive Industry Landscape Ninth ARC India Forum, Pune August, 2011 Rajabahadur V Arcot Kishore M Karandikar Vice President & GM ARC Advisory Group [email protected] 1 © ARC Advisory Group
Agenda Automotive Industry Status in Emerging Countries
including India • Global Automotive Industry Landscape • Global Automobile Sales Outlook India & Automotive • India & Automotive Industry - Trends Manufacturing Industry Continues to Evolve • Invention Based & Basic-needs driven Manufacturing (Europe & NA) • Convergence of Information and Communication Technologies (Japan & Asian Tigers) • IT Enabled Manufacturing – IT Everywhere • Manufacturing Evolution
Emerging Countries and Automotive Industry • LEAP Manufacturing 2 © ARC Advisory Group
Automotive Industry Status in Emerging Countries including India
3 © ARC Advisory Group
GLOBAL AUTOMOTIVE INDUSTRY Landscape
Source: Global Auto Report, Published by Scotia Bank Group
4 © ARC Advisory Group
Global Automobile Sales Outlook 45 ASIA 38.74
40
MILLIONS OF UNITS
35
REST OF THE WORLD 37.26
37.05 32.82
32.29
36.38
34.33
35.35 35.30
33.75
30.67
30
26.60
25
23.08
22.47
20
17.68
15.07 15 10.45 10
6.91
5 0 1990-99 2000-07
2008
2009
2010
2011
2012
2013
2014
Based on Global Auto Report, Scotia Bank Group 5 © ARC Advisory Group
India & Automotive Industry – Present Landscape Globally Fifth Largest Bus and Truck Market by Volume
Globally Second-largest Two-Wheeler Market
Asia’s thirdlargest Private Vehicle market
Emerging as Center of Excellence for Compact Cars
Globally Fourth Largest Commercial Vehicle Market
6 © ARC Advisory Group
India & Automotive Industry - Trend
Expected to contribute 10 percent of India’s
GDP in the next 5-6 years Emerging as an exporter of automobiles and auto components 7 © ARC Advisory Group
Automobile Production Trend 20,000,000
CAGR 13.3%
18,000,000
17,916,035
16,000,000
14,057,064 14,000,000 12,000,000
11,087,997
10,853,930
2006-07
2007-08
11,172,275
9,743,503
10,000,000
8,467,853 8,000,000 6,000,000 4,000,000 2,000,000 0 2004-05
2005-06
2008-09
2009-10
2010-11
8 © ARC Advisory Group
Automobile Export Trend CAGR 24.5%
2,500,000
2,339,333
2,000,000
1,804,426 1,530,594 1,500,000
1,238,333 1,011,529 1,000,000
806,222 629,544 500,000
0 2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
9 © ARC Advisory Group
Automotive Hubs in India
10 © ARC Advisory Group
Other Leading OEMs
11 © ARC Advisory Group
Manufacturing Industry
Continues to Evolve Invention Based & Basic-needs driven Manufacturing (Europe & NA) Higher-order wants driven Manufacturing and Manufacturing Deconstruction (Japan, Asian Tigers)
Factory of the Future / Smart Manufacturing - IT Enabled (Emerging Economies can leapfrog Manufacturing) 12 © ARC Advisory Group
Invention Based & Basic-needs driven Manufacturing (Europe & NA) Focus: Produce, Meet Basic needs First Steam Engine
Public Railway Transcontinental Railway
1809
1769
Airplane
1869
Electric Four Stoke Telegraph Engine
1904
1885-86
1870
1862
1825
Electric Bulb
1879
Telephone
1903
Automobile Triode
Invention based manufacturing Basic-needs driven invention – mobility, communication Started in Europe and NA 13 © ARC Advisory Group
Convergence of Information and Communication Technologies (Japan & Asian Tigers) Invention NA & Europe Production Asia Radio Broadcasting Corporation of America 1919
Television
Computer
1927
Vacuum Tubes / Triodes 1904
1946
Transistors 1947
Integrated Chips 1961
Higher-order wants driven application inventions – entertainment, computing, analysis
Expanding applications – Convergence of Information & Telecommunication Technologies Manufacturing deconstruction Emergence of Asian Tigers
14 © ARC Advisory Group
IT Enabled Manufacturing – IT Everywhere IT in Maintenance
IT in Operations
MES
PLM
IT in Design FA
ARC’s CMM Model 15 © ARC Advisory Group
Manufacturing Evolution
Information and Intelligence Enabled Smart Manufacturing Achieve Excellence in Design, Production and Maintenance – IT Enabled CMM Continually Improve Innovation & Production
Innovate & Produce
16 © ARC Advisory Group
Benefits of Information and Intelligence Enabled Smart Manufacturing Become more agile and responsive Reduce design-engineer-make cycle time Reduce capital expenditure Reduce operational expenses Achieve internal and external collaboration Achieve excellence in design, operations, and
maintenance Gain time-to-market advantages
Emerge as a center of automotive excellence
and innovation Examples: Instrumentation; Automotive
17 © ARC Advisory Group
The Future of the Automotive Industry
18 © ARC Advisory Group
Emerging Countries and Automotive Industry Right Chemistry Exists
• Emerging Countries are Experiencing Economic Growth • Demand for Automobiles is Increasing • Automobile & Auto Component Industries are Expanding • Industry Ecosystems are Emerging and Companies are Becoming Global Sized • Technology is Available • Emerging Countries are well positioned to Leapfrog 19 © ARC Advisory Group
Emerging Perspective
Shifting Economic Power
+
Changing Demographics
+
Powerful New IT Capabilities
+
Business Compulsions
= Emerging Countries and Manufacturing IT Solutions will Shape the Automotive Industry Landscape 20 © ARC Advisory Group
LEAP Manufacturing
Technology and Business Practices for World-Class Manufacturing
Leading-edge
Efficient
• Innovative
• Profitable
• Technology-forward
• High Quality
•Mobile, Social, Cloud, Modelbased, Virtual, PLM, MES, etc.
• Collaborative, Integrated • Performance driven
Agile • Responsive •Collaborative, Networked, Pull-based, Interactive
• Flexible, adaptive, changeable
• Compliant • Safe & Effective • Local/Regional
LEAP Mfg
Progressive • Sustainable •Energy, Carbon, Social, Water, Waste, Closed Loop
• Responsible
Companies In Emerging Markets Can Jump To A Market Leadership Role
21 © ARC Advisory Group
Recommendations
Leapfrog and take the path of LEAP
Manufacturing Invest in Technology Solutions
22 © ARC Advisory Group
Thank You. For more information, contact the author at [email protected] or visit our web pages at www.arcweb.com
23 © ARC Advisory Group
Agenda Automotive Industry Status in Emerging Countries
including India • Global Automotive Industry Landscape • Global Automobile Sales Outlook India & Automotive • India & Automotive Industry - Trends Manufacturing Industry Continues to Evolve • Invention Based & Basic-needs driven Manufacturing (Europe & NA) • Convergence of Information and Communication Technologies (Japan & Asian Tigers) • IT Enabled Manufacturing – IT Everywhere • Manufacturing Evolution
Emerging Countries and Automotive Industry • LEAP Manufacturing 2 © ARC Advisory Group
Automotive Industry Status in Emerging Countries including India
3 © ARC Advisory Group
GLOBAL AUTOMOTIVE INDUSTRY Landscape
Source: Global Auto Report, Published by Scotia Bank Group
4 © ARC Advisory Group
Global Automobile Sales Outlook 45 ASIA 38.74
40
MILLIONS OF UNITS
35
REST OF THE WORLD 37.26
37.05 32.82
32.29
36.38
34.33
35.35 35.30
33.75
30.67
30
26.60
25
23.08
22.47
20
17.68
15.07 15 10.45 10
6.91
5 0 1990-99 2000-07
2008
2009
2010
2011
2012
2013
2014
Based on Global Auto Report, Scotia Bank Group 5 © ARC Advisory Group
India & Automotive Industry – Present Landscape Globally Fifth Largest Bus and Truck Market by Volume
Globally Second-largest Two-Wheeler Market
Asia’s thirdlargest Private Vehicle market
Emerging as Center of Excellence for Compact Cars
Globally Fourth Largest Commercial Vehicle Market
6 © ARC Advisory Group
India & Automotive Industry - Trend
Expected to contribute 10 percent of India’s
GDP in the next 5-6 years Emerging as an exporter of automobiles and auto components 7 © ARC Advisory Group
Automobile Production Trend 20,000,000
CAGR 13.3%
18,000,000
17,916,035
16,000,000
14,057,064 14,000,000 12,000,000
11,087,997
10,853,930
2006-07
2007-08
11,172,275
9,743,503
10,000,000
8,467,853 8,000,000 6,000,000 4,000,000 2,000,000 0 2004-05
2005-06
2008-09
2009-10
2010-11
8 © ARC Advisory Group
Automobile Export Trend CAGR 24.5%
2,500,000
2,339,333
2,000,000
1,804,426 1,530,594 1,500,000
1,238,333 1,011,529 1,000,000
806,222 629,544 500,000
0 2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
9 © ARC Advisory Group
Automotive Hubs in India
10 © ARC Advisory Group
Other Leading OEMs
11 © ARC Advisory Group
Manufacturing Industry
Continues to Evolve Invention Based & Basic-needs driven Manufacturing (Europe & NA) Higher-order wants driven Manufacturing and Manufacturing Deconstruction (Japan, Asian Tigers)
Factory of the Future / Smart Manufacturing - IT Enabled (Emerging Economies can leapfrog Manufacturing) 12 © ARC Advisory Group
Invention Based & Basic-needs driven Manufacturing (Europe & NA) Focus: Produce, Meet Basic needs First Steam Engine
Public Railway Transcontinental Railway
1809
1769
Airplane
1869
Electric Four Stoke Telegraph Engine
1904
1885-86
1870
1862
1825
Electric Bulb
1879
Telephone
1903
Automobile Triode
Invention based manufacturing Basic-needs driven invention – mobility, communication Started in Europe and NA 13 © ARC Advisory Group
Convergence of Information and Communication Technologies (Japan & Asian Tigers) Invention NA & Europe Production Asia Radio Broadcasting Corporation of America 1919
Television
Computer
1927
Vacuum Tubes / Triodes 1904
1946
Transistors 1947
Integrated Chips 1961
Higher-order wants driven application inventions – entertainment, computing, analysis
Expanding applications – Convergence of Information & Telecommunication Technologies Manufacturing deconstruction Emergence of Asian Tigers
14 © ARC Advisory Group
IT Enabled Manufacturing – IT Everywhere IT in Maintenance
IT in Operations
MES
PLM
IT in Design FA
ARC’s CMM Model 15 © ARC Advisory Group
Manufacturing Evolution
Information and Intelligence Enabled Smart Manufacturing Achieve Excellence in Design, Production and Maintenance – IT Enabled CMM Continually Improve Innovation & Production
Innovate & Produce
16 © ARC Advisory Group
Benefits of Information and Intelligence Enabled Smart Manufacturing Become more agile and responsive Reduce design-engineer-make cycle time Reduce capital expenditure Reduce operational expenses Achieve internal and external collaboration Achieve excellence in design, operations, and
maintenance Gain time-to-market advantages
Emerge as a center of automotive excellence
and innovation Examples: Instrumentation; Automotive
17 © ARC Advisory Group
The Future of the Automotive Industry
18 © ARC Advisory Group
Emerging Countries and Automotive Industry Right Chemistry Exists
• Emerging Countries are Experiencing Economic Growth • Demand for Automobiles is Increasing • Automobile & Auto Component Industries are Expanding • Industry Ecosystems are Emerging and Companies are Becoming Global Sized • Technology is Available • Emerging Countries are well positioned to Leapfrog 19 © ARC Advisory Group
Emerging Perspective
Shifting Economic Power
+
Changing Demographics
+
Powerful New IT Capabilities
+
Business Compulsions
= Emerging Countries and Manufacturing IT Solutions will Shape the Automotive Industry Landscape 20 © ARC Advisory Group
LEAP Manufacturing
Technology and Business Practices for World-Class Manufacturing
Leading-edge
Efficient
• Innovative
• Profitable
• Technology-forward
• High Quality
•Mobile, Social, Cloud, Modelbased, Virtual, PLM, MES, etc.
• Collaborative, Integrated • Performance driven
Agile • Responsive •Collaborative, Networked, Pull-based, Interactive
• Flexible, adaptive, changeable
• Compliant • Safe & Effective • Local/Regional
LEAP Mfg
Progressive • Sustainable •Energy, Carbon, Social, Water, Waste, Closed Loop
• Responsible
Companies In Emerging Markets Can Jump To A Market Leadership Role
21 © ARC Advisory Group
Recommendations
Leapfrog and take the path of LEAP
Manufacturing Invest in Technology Solutions
22 © ARC Advisory Group
Thank You. For more information, contact the author at [email protected] or visit our web pages at www.arcweb.com
23 © ARC Advisory Group
