Frost Sullivan Automakers Global Platform Standardisation_August2011

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1. Automaker OEMs to Ride on Platform Standardisation and Modular StrategyAnalysis Forecasts 30 Per Cent Reduction in Vehicle Platforms by 2020 By Sarwant Singh, Partner…
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  • 1. Automaker OEMs to Ride on Platform Standardisation and Modular StrategyAnalysis Forecasts 30 Per Cent Reduction in Vehicle Platforms by 2020 By Sarwant Singh, Partner & Practice Director Automotive & Transportation, and Vishwas Shankar, Industry Analyst Frost & Sullivan, August 2011
  • 2. From Platforms, Architectures to Modular Took-kit• By 2020 the key 12 global auto OEM groups are expected to reduce their platforms from 223 in 2010 to 154, reveals new analysis by global consulting firm Frost & Sullivan.• The adoption of a global platform standardisation and modular strategy is put in place in order to reach a platform reduction of more than 30 per cent.• The top ten platforms will result in a growth from nearly 17 million vehicles in 2010 to more than 33 million by 2020 in the global passenger car and light truck production figures, featuring a staggering increase of 94 per cent.• Consequently, by 2020 the key 12 OEM groups are expected to account for an almost 74 per cent share in the same segment. 2
  • 3. Definitions Platform Strategy: Definitions (World), 2010 There is no standard definition of a platform; however the commonly accepted definition is: A collection of fixed design elements that define its architecture. Platform usually consists of Platform steering system, front suspension, rear suspension, driveline, braking system, powertrain orientation and mountings, and the floor pan that basically supports all these parts. For the purpose of this research, shared platform is defined as a platform shared between Shared Platform two or more models within the same segment or different segments. An architecture defines the overall framework of the vehicle including its footprint, driveline and engine orientations, suspension which forms the vehicle’s DNA and its driving dynamics. Architecture Examples of key architectures are FR (Front engine and Rear drive), RR (Rear engine and Rear drive), MR (Mid engine and Rear drive) and so on. Platform Strategy: Representation (World), 2010 Architectures Platforms Modules Systems Components Source: Frost & Sullivan analysis. 3
  • 4. Volkswagen Adopts Modular Toolkit Strategy to BecomeNumber One OEM by 2018• With more than 95 per cent of its total vehicle production by 2020 targeted from just three platforms each, Volkswagen group in the high volume segment and Daimler group in the luxury segment globally are expected to have the highest degree of platform standardisation and widest range of vehicle models on a single platform.• Volkswagen group is expected to surpass the current frontrunner, Ford group, with its modular toolkit strategy.• The German carmaker will produce increased numbers of models and their respective volumes per platform, while efficiently integrating new and innovative technologies. Source: Frost & Sullivan analysis. 4
  • 5. Top 10 Production Platforms – 2020: By 2020 nine out of top ten platforms are expected to have volumes in excess of two million units annually as against three out of the top ten in 2010 – a three-fold growth Platform Strategy: Top 10 Production Platforms (World), 2020• MQB platform (Volkswagen) followed by B0 platform (Renault-Nissan) and Delta 3 platform (General Motors) are expected to share the top three spots respectively by 2020 compared to PQ35 (Volkswagen), B (Renault-Nissan) and HD (Hyundai) in 2010.• By 2020, the top 10 platforms are expected to account for more than 33 million or over 26 per cent of the global production volumes as against over 17 million vehicles or 23 per cent in 2010. 2020 Jetta, Golf, Gol, Polo, Fabia, A3, Leon, Ibiza New Logan, Duster, Cube, Bluebird, Tiida, B-Car1 New Cruze, Volt, ATS, Nubira, Astra, Zafira Elantra, i30, iX35, Cee’d, Forte, Sportage Stable Platform C-Max, Kuga, Focus, Escape, MKC, MKS Upward Movement Corolla, xB, RAV4, Matrix, Verso, Wish Downward Movement New C3, DS3, M4, 206/207/208, M3, sub-4007 New entrant; moved up New New Linea, Wrangler, Journey, D-car, Delta, Bravo New Aveo, Corsa, Sail, Meriva, small SUV, small CUV New xD, Yaris, Etios, Platz, iSt, Ractis Units (Millions) Source: Frost & Sullivan analysis. 5
  • 6. Changing Market Dynamics Impact Vehicle PlatformStrategy• The standardisation of platforms is expected to impact the OEM group brands with their vehicle model permutations and combinations look leaner than ever before. By 2020, Daimler, Volkswagen and the Fiat-Chrysler groups respectively, are expected to reduce 60-65 per cent of their platforms.• As a result, their average production volume per platform is expected to increase more than four-fold by 2020 compared to 2010.• Overall, the average vehicle production per platform is expected to increase at least three fold by 2020 from current levels of more than 0.24 million units in 2010.• And, nine out of the top ten platforms are expected to have volumes in excess of two million units annually by 2020 as against three out of the top ten in 2010. Source: Frost & Sullivan analysis. 6
  • 7. India and China - Key Regions Driving PlatformStandardization and Modular Approach• Emerging Asian economies will certainly be driving platform standardisation and modular approach over Europe and North America:• India and China are major drivers themselves for OEMs to strongly adopt platform standardisation strategy.• Approximately 160 of the 800 discrete models to be manufactured and sold globally by top 12 OEM groups between 2010 and 2020 are expected to be manufactured - and also ideally sold - in China, in comparison to 140 discrete models for the United States.• More than 24 of these 800 discrete models, or approximately three per cent, are global vehicle models and expected to be manufactured and ideally sold in both China and the Unites States.• This clearly shows the focus on emerging economies as key to growth. Source: Frost & Sullivan analysis. 7
  • 8. VP Ratio – Volumes Produced to Platforms Used: India expected to rank number one at 3.8, followed by China at 2.4, Europe and North America at 1.8 and 1.6 respectively on VP Ratio • VP ratio is the ratio of volumes produced to the platforms used in 2020 over volumes produced to the platforms used in 2010. • It is used as a measure to understand the impact of economies in driving platform standardization and modular approach Platform Strategy: VP Ratio (World), 2010 and 2020 Platforms Volumes Region VP 2010 VP 2020 VP Ratio= VP2020/VP2010 2010 2020 2010 2020 North America 59 52 10.3 14.5 0.17 0.28 1.60 Europe 115 88 18.6 26.5 0.16 0.30 1.86 China 59 51 7.0 14.8 0.12 0.29 2.44 India 39 43 1.6 6.8 0.04 0.16 3.85 Volumes Produced in 2020 Volumes Produced in 2010VP Ratio = Platforms used in 2020 Platforms used in 2010 Note: All figures are rounded. The base year is 2010. Source: JD Power, Frost & Sullivan analysis. 8
  • 9. Deriving a Modular Platform Strategy Blueprint• Frost & Sullivan also identified several factors for OEMs to derive a blueprint of their platform standardisation strategy:• The emerging regions in which the OEMs operate, both produce and sell, and which directly govern their platform standardisation and modular strategy, are certainly one.• Another factor is the modules themselves used as building blocks of future platforms, and OEMs are expected to bring variations into the vehicle through effective use of electronics.• And finally, there is the ability of the OEM groups to quickly understand the perceived benefits gained by having a reduced supplier base as a result of sharing components, systems and modules across platforms. Source: Frost & Sullivan analysis. 9
  • 10. Comparative Analysis of Key Global OEMs Platform Strategy Platform Strategy: Comparative Analysis Group Vs. Platform Strategy (Global), 2010-2020Platform Strategy Platform Strategy 61 per cent 10 per cent total platform total platform 300 per cent reduction 81 per cent reduction production 200 per cent 21 per cent production volumes models growth models volumes growth per per platform growth per Volkswagen growth per Toyota platform Group platform group platform “2010-2020” “2010-2020” Mass Volume 2015 sales 20 per cent target at Indices rank: More than 15 Increase profits Indices rank: 3 reduction, each Vehicle Segment 50%:50% 11 per cent (7 to 8 per (unit cost and (Industrialized global sales cent by 2018) capital versus Produce more share from Produce more investment) emerging China (2015) than 12.2 than 10.9 market) million million vehicles vehicles by by 2018Group Strategy Group Strategy 2018 No reductionPlatform Strategy Platform Strategy in total 67 per cent platforms; total platform introduction of 400 per cent reduction 86 per cent new electric production 270 per cent production vehicle 53 per cent volumes platform models growth volumes growth per models growth per platform Luxury Vehicle growth per per platform Daimler BMW platform Group Segment platform Group “2010-2020” “2010-2020” Targets Save atleast continuous Increase sales Go For 10- Indices rank: 1 Indices rank: 7 from emerging billion dollars double digit Profitable economies per annum profit margin growth at 10 (from 15%, to from module per cent by Produce more per cent Produce more 25% by 2018) strategy 2015 than 2.4 than 2.3 million million vehicles vehicles by by 2018 2018Group Strategy Group Strategy Source: Frost & Sullivan analysis. 10
  • 11. Conclusion• Global suppliers are willing to follow vehicle manufacturers and set up global facilities closer to OEMs final assembly lines, resulting in the reduction of discrete parts which otherwise are another cause of concern from handling just too many parts in the entire supply chain.• As fewer off-the-shelf, readily available, proven components and systems from an existing supplier base lead to quicker decision making from an OEMs point of view, avoiding time delay in developing new parts and investing in identifying these building blocks as sub-groups or modules largely form the modular vehicle platform blue-print. 11
  • 12. For Further InformationKatja FeickCorporate Communications ManagerEuropeDirect: +49 (0) 69 7703343Email: 12
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