World Car Trends 2014 - "Smart Efficiency and Digital Intelligence"

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World Car Trends 2014 - "Smart Efficiency and Digital Intelligence"
World Car Trends 2014
“Smart Efficiency and Digital Intelligence”
New York, April 2014
World Car Trends 2014 - "Smart Efficiency and Digital Intelligence"
World Car Trends 2014

Global Expert Community         Global Media Trends

69 Top Automotive Journalists   TV, Print, Online                          News Channels

All World Car Jurors            Blogs, Forums, Networks                    Social Channels

                                Top 25 markets                                  Countries

                                All automotive brands [> 150] and models           Brands
World Car Trends 2014 - "Smart Efficiency and Digital Intelligence"
World Car Trends 2014 | Summary

 Introduction                                                  The Electric Vehicle Recession?
 The World Car Awards brings together top journalists          After the hype in 2012, Electric vehicles are currently
 from all over the world. PRIME Research combines the          losing some momentum.
 expertise of this panel with our industry-leading media       Plug-in hybrids are seen as the most promising electric
 study on over 150 brands across 25 markets globally.          drivetrain option for 2014, however the onset of
 Automotive Trends 2014                                        premium electric vehicles driven by the BMW i3 and
 Efficiency, lightweight materials, design, connectivity and   Tesla Model S bring electric vehicles back into the
 new energy powertrains are the most important                 spotlight. Coverage around these two models accounts
 automotive trends for 2014. These trends form part of a       for over 40% of all media coverage on electric
 bigger picture within the automotive industry, “the           vehicles. Our expert community evaluates these two
 efficiency cluster” which we at PRIME call “Smart             models far better than first and second generation EVs.
 Efficiency”.                                                  “Digital Intelligence”
 “Smart Efficiency”                                            Connectivity and in-car electronics rank as the fourth
 Smart Efficiency is driven by a variety of related            most important trend, with infotainment and
 technologies like the downsizing of engines, while            connectivity systems seen as increasingly significant.
 improving power and performance, significant weight           Digital intelligence is describing a major macro trend of
 reduction and more stability, improved aerodynamics           the years to come. Tech giants such as Apple, Google &
 while increasing desirability and new energy                  Microsoft have now joined the game: teaming up with
 powertrains; particularly plug-in hybrids.                    automotive brands to create the next generation of
                                                               digital cars.
 Lightweight Constructions
 Lightweight materials are currently in the spotlight. Once    “Smart Efficiency” and “Digital Intelligence” represent key
 reserved for premium cars, the Ford F150 has brought          trends in the industry for 2014. Utilising these trends is
 aluminium to the mass market, and the BMW i3 has              the challenge for the automotive industry today and in
 positioned carbon fibre as a material manageable and          the near future.
 suitable for premium cars.
                                                                                                                             3
World Car Trends 2014 - "Smart Efficiency and Digital Intelligence"
Content

          1. Top Automotive Trends

          2. New Energy Cars

          3. The “Digital Car“
Efficiency is the top trend in 2014
    The current “efficiency cluster“ is driven by downsizing of engines, lightweight constructions, improved
    aerodynamics and plug-in hybrids.

1        Efficiency

2        Lightweight Materials                                                                                             Top 5
3        Design                                                                                                            Trends
4        Connectivity                                                                                                      2014
                                         Plug-in Hybrids   Battery Electric Vehicles   Fuel Cell

5        New Energy Cars

         Quality

         Safety

         Budget Cars

         Car Sharing

                                        0%                 5%                   10%                15%   20%   25%   30%

     ?    “What will be the most important trends in the automotive industry in 2014?”                                              5
Lightweight is the top emerging trend in 2014
The importance of lightweight constructions and materials has been on the increase since 2012.

                                2012                                                         2013                                         2014

Efficiency                                                   Connectivity                                       Efficiency

                                                                                                                Lightweight
Connectivity                                                 Efficiency
                                                                                                                Materials
                                                                                                                                                 2
New Energy                                                   New Energy
                                                                                                                Design
Cars                                                         Cars

Design                                                       Design                                             Connectivity

                                                             Lightweight                                        New Energy
Budget Cars
                                                             Materials                     5                    Cars

Safety                                                       Budget Cars                                        Quality

Quality                                                      Quality                                            Safety

Lightweight
Materials             8                                      Safety                                             Budget Cars

Car Sharing                                                  Car Sharing                                        Car Sharing

               0%         10%          20%       30%                        0%         10%          20%   30%                  0%   10%          20%   30%

 ?    “What will be the most important trends in the automotive industry in 2012 / 2013 / 2014?”                                                       6
Engine downsizing is seen as the most promising weight saver
Two important shifts in perception – the Ford F150 for aluminium and the BMW i3 for carbon fibre.

                                  mixed                              good                          very good

                                                                                                                   The actual downsizing of an engine for weight
Downsizing of Engines /
                                                                                                                   reduction is seen as the most promising
Powertrains                                                                                                        technology to save weight.

                                                                                                                   The new Ford F-150 shifts the image of aluminium
Aluminium                                                                                                          from a rather exclusive to a more volume
                                                                                                                   material for weight-saving.

                                                                                                                   Clever material mix is seen as a very promising
Material-Mix                                                                                                       option for weight saving.

                                                                                                                   The BMW i3 could change the perception of
                                                                                                                   carbon fibre: from an expensive and exclusive to
Carbon Fibre                                                                                                       an affordable, mass-market material for weight-
                                                                                                                   saving.

                                                                                                                   High strength steels are still evaluated very
                                                                                            2014                   positively, but are seen due to the already wide
High Strength Steel                                                                         Expert Panel           use within the industry as a kind of maxed out
                                                                                                                   option for weight saving.

                              0                           1                             2                      3

 ?   “From your point of view, what are the most promising lightweight technologies?”                                                                                 7
Content

          1. Top Automotive Trends

          2. New Energy Cars

          3. The “Digital Car“
Electric vehicle recession?
After the hype in 2012, electric vehicles finally arrived in ”reality“ – but electric vehicles are still among the
top 5 most important trends within the industry.

                                2012                                                         2013                                             2014

Efficiency                                                   Connectivity                                           Efficiency

                                                                                                                    Lightweight
Connectivity                                                 Efficiency
                                                                                                                    Materials
New Energy                                                   New Energy
Cars                                            3            Cars                                         3         Design

Design                                                       Design                                                 Connectivity

                                                             Lightweight                                            New Energy
Budget Cars
                                                             Materials                                              Cars
                                                                                                                                                5
Safety                                                       Budget Cars                                            Quality

Quality                                                      Quality                                                Safety

Lightweight
                                                             Safety                                                 Budget Cars
Materials

Car Sharing                                                  Car Sharing                                            Car Sharing

               0%         10%          20%       30%                        0%         10%          20%       30%                  0%   10%          20%   30%

 ?    “What will be the most important trends in the automotive industry in 2012 / 2013 / 2014?”                                                           9
Visibility of EVs is pushed by Tesla Model S and BMW i3
Out of more than 250 EV models in 2013-2014, the Tesla Model S and BMW i3 combined account for more
than 40% of all coverage. Almost every second electric vehicle story is about either one of them.

                           Media Panel | Share of coverage                                                        2013-2014
                                                                                         12%

                                                                       Tesla and BMW i
   Emerging Trend                Hype                Slowdown                                                     Other EVs
                                                                        game changer?
                                                                                                                   58.3%

                                                                                         9%

                                                                                         6%
                                          5,1%
                          4,8%                                         4,8%       4,8%         BMW i3                               Tesla Model S
                                                         4,6%                                   21.3%                                   20.4%

             2,9%
                                                                                         3%
                                                                                                   100% = Total e-car coverage in 2013/2014
  2,0%

                                                                                                                  42%
                                                                                         0%
  2008       2009         2010           2011           2012           2013       2014
                100% = Total automotive media coverage in respective year                      100% = Total electric vehicle coverage in 2013/2014
                                                                                                                                                     10
PHEVs remain the most promising electric drivetrain option
    However, BEV are experiencing a new momentum through premium electric vehicles.

                                              very poor                  mixed                        very good

    Plug-in hybrids

    Electric vehicles with                                                                                            Is the Tesla Model S a game changer? Combining
    range extender                                                                                                    zero emissions with a good range and breathtaking
                                                                                                                      sports car performance.

                                                                                                                        ► New momentum through premium electric vehicles.
                                                   2013
                                                   Expert Panel

3         Battery electric vehicles
                                                   2014
                                                   Expert Panel
                                                                  2013                2014

                                                                                                                                    ► But safety issues remain.

    Fuel cell vehicles

                                         -3               -2       -1      0          1           2               3

     ?   “From your point of view, what are the most promising powertrain options regarding e-mobility?”                                                                    11
Tesla and BMW with outstanding EV reputation
    BEV gain credit in 2014 due to i3 and Tesla Model S – Premium electric vehicles might be the game changer
    in the future.

                                   very poor                            mixed             very good

1     Tesla Model S
                                                                                                             Premium electric vehicles
2     BMW i3

    Second generation
    and
    compact
    electric vehicles

    First Generation
    and
    low budget                                                                                               “Compromised“ electric vehicles
    electric vehicles

                                                                                          2014
                                                                                          Expert Panel

                              -3               -2          -1             0       1   2                  3

     ?    “How would you rate the following e-cars from a general perspective?”                                                                12
Norway: Tesla achieves an 11% market share in March ‘14
Exponential growth of EVs in Norway; especially the Tesla Models S due to generous government subsidiaries.

                                             Electric vehicles registration figures in Norway

                                                                                                12.000
                                                                                                         ›   EVs in Norway
                                                                                                             achieved a 5.6%
                                                                                                10.000       market share in 2013.

                                                                                                         ›   No purchase tax, no
                                                                                                8.000
                                                                                                             VAT, no tolls are
                                                                                                             making EVs very
                                                                                                6.000
                                                                                                             attractive.

                                                                                                         ›   Free and extra parking
                                                                                                4.000        areas for EVs.

                                                                                                         ›   EV infrastructure.
                                                                                                2.000

                                                                                                         ›   Clean Norwegian
                                                                                                0
                                                                                                             energy production.
2004   2005   2006   2007   2008   2009   2010   2011   2012    2013     2014    2015    2016

                                                                                                                                      13
Norway with pioneering character regarding E-Mobility
The former benchmark market for E-Mobility, Japan, slightly loses the confidence of the expert community
and remains on one level with Germany and the USA.

                                                      very poor               mixed                                    very good

         Norway

         Japan

         Germany

         USA                                                                                                    The Tesla factor
                                                                                                                ›         Supercharger
                                                                                                                          infrastructure
                                                                                                                ›         Plans for
         France                                                                                                           battery
                                                                                                                          gigafactory

         UK

                                                                                                           Ambitious plans, limited
         China                                                                                             momentum
                                                                                                           ›        5 million e-cars in
                                                     2013                                                           2020
         Italy                                       Expert Panel                                          ›        New joint-venture
                                                                                                                    brands arrive
                                                     2014                                                                  ›      Denza
         Spain                                       Expert Panel                                                          ›      Zinoro

?   “Which markets will be the key drivers for e-mobility?”                                                                                14
Fuel-Cell with chances in the long run
In the last 10 years, Honda showed the strongest ambitions of all manufacturers regarding fuel cell
technology, followed by Hyundai/Kia and Mercedes-Benz.

                 Fuel-Cell “Hype“ period                       Attention-shift to BEV                  Re-Focus on FCEV                      Comeback as “Next Generation EV“?
                 Most major manufacturers focus on FCEV        First volume BEV appear on the          Especially Hyundai/Kia continues to   FCEV in series (announcements):
                 as battery technology is not improving fast   market and the BEV hype begins.         focus on FCEV and in 2014             Hyundai/Kia: 2014 | Toyota: 2015 | Honda: 2016 | Daimler: 2017
                 enough and the range issue as well as high    Manufacturers shift their focus on      announcements of affordable FCEV
                 costs are thought hard to be solved.          battery electric vehicles rather than   in series strongly increase.
                                                               continuing their FCEV strategy.

                                                                                                                                                                                                                 1,0%

                                                                                                                                                                                                                 0,8%

                                                                                                                                                                                                                 0,6%

                                                                                                                                                                                                                 0,4%

                      0,6%
                                    0,6%
  0,5%
                                                  0,5%
          0,4%                                                                                                                                                                                                   0,2%
                                                                              0,3%                                     0,3%
                                                                                                          0,3%
                                                                0,1%                        0,1%
                                                                                                                                                             100% = all automotive coverage in respective year
                                                                                                                                                                                                                 0,0%
 2005    2006        2007          2008          2009           2010          2011          2012         2013          2014         2015         2016         2017         2018         2019          2020

                                                                                                                                                                                                                 15
Content

          1. Top Automotive Trends

          2. New Energy Cars

          3. The “Digital Car“
Connectivity is already a key factor in evaluating a car
For 71% of automotive journalists, connectivity already is or is quickly becoming a key factor in evaluating a
car.

     “Yes, as it becomes a priority for young                                                      “It is becoming a key factor, because
                                     buyers.”                                                      younger people do not care about
                                                                                                   powertrains, maximum speed and
                                                                                  Increasingly     emotional driving anymore.”
                                                                                     [42%]

                                                     Already
                                                       [29%]

                                                                                     Not yet
                                                                           No         [17%]
“No. Ease of use is, but connectivity is not
                                                                          [12%]
          critical. It's also very difficult to
communicate, given that average readers
   just want to know if they can plug the                                                          “Not yet but is going to grow once they
                            phone in or not.”                                                      sort out the basics.”

 ?      2013 Expert Panel: “Is connectivity a key factor in evaluating a car?”                                                               17
In-car electronics and connectivity are increasingly important
Exponential increase of media attention to in-car electronics and connectivity.

                                 Media Panel | Share of coverage                                                               Top Connectivity Trends
                                                                                                     12%

                                                         In-car electronics play an increasingly           Internet-based
                                                           important role within the product               Infotainment
                                                                        strategy.                          Systems
                                                                                                     9%

                                                                                                           Driver Assistance
                                                                                              6,4%

                                                                                                     6%

                                                                                       3,9%                Navigation

                                                                                                     3%

                                                            1,5%        1,5%
                                                                                                           Communication
                        0,2%                                                                                                                                   2013
     0,1%     0,1%                 0,1%         0,2%
                                                                                                                                                               Expert Panel
                                                                                                     0%
 2006         2007     2008        2009        2010        2011        2012            2013   2014                                 0%           20%      40%                  60%

                     100% = all coverage about “product strategy“ in respective year

 ?      2013 expert panel: What will be the most important connectivity trends in the automotive industry in 2013?”                                                           18
The “digital” car | > 100 million lines of code
Cars are no longer only hardware, they are also software products. Cars already have more lines of code
than aircrafts and operating systems like Windows 8 or Apple Tiger.

100.000.000

 90.000.000

 80.000.000
                          F35 Fighter Jet
 70.000.000

 60.000.000                            Boeing 787
 50.000.000

 40.000.000                                   US Military Drone
 30.000.000
                                                        F22 Raptor Fighter
 20.000.000
                                                               Jet
 10.000.000

         0                                                           Space Shuttle

   Car Software and its
      “lines of code”
   of average modern
       high-end-car                                                                                       19
Silicon Valley is moving in on the car industry
Google is clearly seen as the key driver for the “digital car”. Apple and Microsoft are seen as more
conservative.

                                        passive/conservative                   pro-active/aggressive

                                                                                                           “Fiat spent years betting on the wrong Microsoft horse.”
                                                                                                           The Ford Sync system is also far away from being
                                                                                                           benchmark:
                                                                                                           “Ford, with its hopeless voice command system, small
                                            2014                                                           screens and convoluted programming if you can't get
                                            Expert Panel                                                   the voice commands to work.”

                                    0                          1           2                           3

 ?   “Which IT companies will be the key drivers for the “digital car”?”                                                                                          20
Autonomous driving wins credit in 2014
Overall, safety related driver assistance systems are evaluated much more positively than comfort features.

                                        not important at all                                           mixed                   very important

Brake Assist Systems

Pre-Crash Systems

Intelligent Lights

Pedestrian Detection

Blind Spot Detection

Adaptive Cruise Control

Automated Crash Reporting

Traffic Sign Recognition

Attention Assist
                                              2013
Nightvision Systems
                                              Expert Panel

Lane Keeping Systems
                                              2014
                                              Expert Panel
Park Assist

Autonomous Driving
                                   -3                          -2                -1                      0             1   2                     3

 ?    “How important and desirable are the following ‘Advanced Driver Assistance’ features from your point of view?”                            21
Autonomous cars are expected within the next 5 years
The world car experts are anticipating autonomous cars in series production within the next five years.

                                                5 Years

2014     2015      2016       2017      2018      2019       2020      2021       2022   2023   2024   2025   2026   2027   2028   2029   2030

 ?   “When do you expect to see fully autonomous driving cars in series production?”                                                         22
Key markets for autonomous driving are USA, Germany, Japan
Due to high costs and the need for infrastructure, autonomous driving will be strongly pushed by the most
developed car markets.

                                       reluctant               passive/conservative       pro-active/aggressive

          USA
                                                                                                                       USA, Germany and Japan are clearly
          Germany                                                                                                      seen as the key markets for
                                                                                                                       autonomous driving.
          Japan

          UK

          France

          China

          Italy

                                                                                                    2014
          Spain                                                                                     Expert Panel

                                  -3               -2     -1            0             1         2                  3

 ?   “Which markets will be the key drivers for autonomous driving?”                                                                                        23
Challenges to autonomous driving
Legislation is seen as the biggest challenge to autonomous driving, closely followed by infrastructure and
industry standards for Car-to-Car and Car-to-X communications.

                                                  mixed                                                   important       very important

Legislation (on federal & national level)

Infrastructure Investments

Industry standards for Car-to-Car
and Car-to-X communications

Consumer Acceptance

Integrity of Technology

New Business Models & Scenarios

Automotive Ecosystem (new players)                  2014
                                                    Expert Panel

                                              0                                        1                              2                     3

 ?    “How important are the following challenges enabling autonomous driving from your point of view?”                                    24
Safety is key to consumer acceptance of autonomous driving
However, extra costs are seen as the second most important factor to clear the way for autonomous cars.

                                       mixed                       important                 very important

                                                                                                                  Safety is the key to consumer acceptance of autonomous
Safety / crash elimination
                                                                                                                  driving.

Extra cost

Reduced travel times

Comfort

Increased productivity                                                                                            City motorists in Europe and the US waste Ø 60-80 hours
(work while driving)                                                                                              per year in congestion.

Data protection

Improved energy efficiency

Reduced need for new
infrastructure

New models of vehicle ownership
                                                                                               2014
(e.g. car sharing)                                                                             Expert Panel

                                   0                      1                      2                            3

 ?    “How important are the following factors from your point of view regarding the consumer acceptance of autonomous driving?”                                            25
Contact

                                                                                       PRIME Mainz (Germany)

                                                                                             PRIME Oxford (UK)
PRIME Ann Arbor (USA)
                                                                                     PRIME Zurich (Switzerland)
PRIME New York (USA)                                                                    PRIME Shanghai (China)

                                                                                    PRIME Delhi-Gurgaon (India)

PRIME São Paulo (Brazil)

PRIME Montevideo (Uruguay)

Dr. Rainer Mathes            Bernd Hitzemann                Jens Meiners
PRIME Research               PRIME Research                 World Car Awards
Chairman                     Project Director               Director Steering Committee World Car Awards
mathes@prime-research.com    hitzemann@prime-research.com   jmeiners@hearst.com
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