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Advanced Technologies Catalyzing Recalibration of Growth Strategies in a
Flat-World Eco-System
Advanced Technologies Catalyzing Recalibration of Growth Strategies in a
Flat-World Eco-System
Sandeep Kar
Global Manager – Commercial Vehicle Research
Sandeep Kar
Global Manager – Commercial Vehicle Research
In the Developed World: Increasing Trend of De-Urbanization – Polarization of Commercial Vehicle Classes and Rising Demand for Hybrid / Electric Commercial VehiclesIn the Developed World: Increasing Trend of De-Urbanization – Polarization of Commercial Vehicle Classes and Rising Demand for Hybrid / Electric Commercial Vehicles
Most offices / retail centers move to the first belt suburbs except non cost sensitive activities: city centres becoming shopping areas (small scale deliveries) for expensive goods and living areas for “double income, no kids” households
– Hybrid / electric LCVs deliver peak efficiency and cost benefits in intra-city areas
Manufacturing plants, industry offices move out to the first belt area as also medium income families while manufacturing facilities and low-medium income families relocate in the second and third belt areas with logistics centers created on 2nd belt periphery‘Green wave’ families living outside cities in outer suburban area. Hypermarkets and malls mostly created inside the third belt low cost area (large scales deliveries)
– HCVs, long-haul vehicles, and inter-modal transportation centers support hub-and-spoke logistics infrastructure
Most offices / retail centers move to the first belt suburbs except non cost sensitive activities: city centres becoming shopping areas (small scale deliveries) for expensive goods and living areas for “double income, no kids” households
– Hybrid / electric LCVs deliver peak efficiency and cost benefits in intra-city areas
Manufacturing plants, industry offices move out to the first belt area as also medium income families while manufacturing facilities and low-medium income families relocate in the second and third belt areas with logistics centers created on 2nd belt periphery‘Green wave’ families living outside cities in outer suburban area. Hypermarkets and malls mostly created inside the third belt low cost area (large scales deliveries)
– HCVs, long-haul vehicles, and inter-modal transportation centers support hub-and-spoke logistics infrastructure
1950s Urbanization
2000s Suburbanization
2015s Network City
Urban sprawl, first highways and ring roadUrban sprawl, first highways and ring road
Creation of the historic centre and districtsCreation of the historic centre and districts
Third suburban area and cities along the highways created, ring road overblown by the urban sprawl
Third suburban area and cities along the highways created, ring road overblown by the urban sprawl
2020s: Branded Cities
Source: Frost & Sullivan
Ring Road Motorway, Living
Areas growing outside the ring road as seen in
London
Ring Road Motorway, Living
Areas growing outside the ring road as seen in
London
In the Developing World: By 2020, We Will See Emergence of About 26 Mega Cities Creating Demand for “City Trucks”In the Developing World: By 2020, We Will See Emergence of About 26 Mega Cities Creating Demand for “City Trucks”
Example 1: Johannesburg and Pretoria becomes one BIG Mega City called “Jo-Toria”Example 1: Johannesburg and Pretoria becomes one BIG Mega City called “Jo-Toria”
Example 2: Town planning could evolve with offices and homes adjacent to each other or within a small compound area (e.g. Chennai, Sao Paolo)
Example 2: Town planning could evolve with offices and homes adjacent to each other or within a small compound area (e.g. Chennai, Sao Paolo)
Core CityCore City
Satellite TownsSatellite Towns
HomeHomeOfficeOffice
2020 + Interconnectivity with Sub Satellite Towns
Global Commercial Truck Production: Polarization of Truck Classes – Light and Heavy Commercial Vehicle Segments Growing RapidlyGlobal Commercial Truck Production: Polarization of Truck Classes – Light and Heavy Commercial Vehicle Segments Growing Rapidly
LCVs and HCVs emerging as most prevalent vehicle classes in the global and North American markets, implying polarization of demand. MCVs losing considerable market share in EU. HCVs and LCVs experiencing demand growth in China and India. Higher GVWR ratings imply heavier mega-trucks in Western EU and NA.
LCVs and HCVs emerging as most prevalent vehicle classes in the global and North American markets, implying polarization of demand. MCVs losing considerable market share in EU. HCVs and LCVs experiencing demand growth in China and India. Higher GVWR ratings imply heavier mega-trucks in Western EU and NA.
20082008
Heavy CV 16.9%
Medium CV 7.1%Medium CV 7.1%
Light CV 76.0%Light CV 76.0%
17.89 Million CV17.89 Million CV
MD+HD CV = 4. 2 MillionMD+HD CV = 4. 2 Million
22%
10%
62%
7%
24%
6%
63%
7%
18%
47%
29%
6%
16%
11%
67%
6%
19%
7%
67%
7%
16%
38%
40%
7%
20082008 20202020
EuropeEurope North AmericaNorth America AsiaAsia OthersOthers20202020
23.49 Million CV23.49 Million CV
MD+HD CV = 4. 7 MillionMD+HD CV = 4. 7 Million
Heavy CV 15.4%
Medium CV 4.3%Medium CV 4.3%
Light CV 80.3%Light CV 80.3%
Light Commercial
Vehicles
Medium Commercial
Vehicles
Heavy Commercial
Vehicles
Highest Ranking Benefits of Powertrain Technologies: Clear and Present Demand for Hybrid Powertrain TechnologiesHighest Ranking Benefits of Powertrain Technologies: Clear and Present Demand for Hybrid Powertrain Technologies
6%
5%
5%
17%
59%
5%
6%
6%
6%
6%
9%
20%
19%
17%
5%
8%
8%
10%
10%
22%
18%
12%
0% 20% 40% 60% 80% 100%
#1 Ranking #2 Ranking #3 Ranking
6%
5%
5%
17%
59%
5%
6%
6%
6%
6%
9%
20%
19%
17%
5%
8%
8%
10%
10%
22%
18%
12%
0% 20% 40% 60% 80% 100%
#1 Ranking #2 Ranking #3 Ranking
Access to Powertrain Support InfrastructureAccess to Powertrain Support Infrastructure
Highest Ranking Benefits of Powertrain Technologies (N = 109)Highest Ranking Benefits of Powertrain Technologies (N = 109)
Lower Level EmissionsLower Level Emissions
Lower Weight PenaltyLower Weight Penalty
Reduce IdlingReduce Idling
Residual ValueResidual Value
Effectiveness Under All Operating ConditionsEffectiveness Under All Operating Conditions
Attractive Lifecycle CostsAttractive Lifecycle Costs
Longer LifecycleLonger Lifecycle
Reduced Maintenance RequirementReduced Maintenance Requirement
ReliabilityReliability
Fuel EfficiencyFuel Efficiency
Note: Proportions less than three not shown numerically in chart.Note: Proportions less than three not shown numerically in chart.
Q: When purchasing powertrain technologies, please rank the top three benefits that are most important to your
fleet from the following list below?
Q: When purchasing powertrain technologies, please rank the top three benefits that are most important to your
fleet from the following list below?
Hybrid Powertrain Technologies – offer solutions but pose
challenges too!!
20092009 20202020
Fuel-EconomyEmissions
Lifecycle Cost
Idling
Driver Retention
Truck Design Issues
Class 6-8 Trucks for 2020 – Hybrids Rising in North America and Could Make up 15% of Total Sales by 2020Class 6-8 Trucks for 2020 – Hybrids Rising in North America and Could Make up 15% of Total Sales by 2020
Hybridization of North American Commercial Trucks (Class 6-8): Production Volumes and Market Shares of Major OEMs (2008-2015),
Hybrid Power Source (2009-2012)
Hybridization of North American Commercial Trucks (Class 6-8): Production Volumes and Market Shares of Major OEMs (2008-2015),
Hybrid Power Source (2009-2012)
20082008
PACCAR 27%
Navistar 62%Navistar 62%
Daimler 11%Daimler 11%
Hybrid ProductionHybrid Production 600600
20152015
PACCAR 23%
Navistar 39%Navistar 39%
Daimler 16%Daimler 16%
Hybrid ProductionHybrid Production 39,40039,400
Volvo/Mack 11%Others 11%
8% of Class 6-8 Truck Production
8% of Class 6-8 Truck Production
0
2,500
5,000
7,500
10,000
12,500
2009 2010 2011 2012
Electric Hybrid Hydraulic Hybrid
0
2,500
5,000
7,500
10,000
12,500
2009 2010 2011 2012
Electric Hybrid Hydraulic Hybrid
1,1001,100 2,3002,300
5,6005,600
10,70010,700
Hybrid Truck ProductionHybrid Truck Production
Conventional HD Trucks
Hybrid HD Trucks
Electric Commercial Vehicle Market: Open for BusinessElectric Commercial Vehicle Market: Open for Business
Without Government funds EV do not have a future, as initial cost is very high
Without Government funds EV do not have a future, as initial cost is very high
Electric Vehicle Market: Definition of Electric Commercial Vehicle Attractiveness (NA), 2009
Electric Vehicle Market: Definition of Electric Commercial Vehicle Attractiveness (NA), 2009
Standard Route from a depot / warehouse / distribution center to various client locations and
back to warehouse
Standard Route from a depot / warehouse / distribution center to various client locations and
back to warehouse
DepotDepot
Total of 18,929 units sold in 2016 from 1,982 units in 2010 at CAGR of 38%
Best Fit for Electric Commercial Vehicles: Urban/semi-urban distribution (typically under 100 miles) and GVWR< 7.5 TonnesBest Fit for Electric Commercial Vehicles: Urban/semi-urban distribution (typically under 100 miles) and GVWR< 7.5 Tonnes
Inter Urban distribution
1118
Long distance1726
40
12
7.5
3.5
GCW / GVW 1* GCW / GVW 1* (tonne)(tonne)
Long distance25
Urban distribution7.2
Urban distribution4
Urban distribution1.5
Pure Electric Pure Electric AttractivenessAttractiveness
Typical ApplicationTypical ApplicationLoad Capacity Load Capacity (tonne)(tonne)
Voice of Your Customers: Fleet Managers Demanding Less Data, More Information that Enables Cost SavingsVoice of Your Customers: Fleet Managers Demanding Less Data, More Information that Enables Cost Savings
41%
20%
7%
14%
9%
10%
7%
9%
6%
6%
11%
5%
6%
6%
9%
7%
6%
10%
9%
7%
8%
20% 16%
15%
15%
0% 20% 40% 60% 80%
#1 ranking #2 ranking #3 ranking
41%
20%
7%
14%
9%
10%
7%
9%
6%
6%
11%
5%
6%
6%
9%
7%
6%
10%
9%
7%
8%
20% 16%
15%
15%
0% 20% 40% 60% 80%
#1 ranking #2 ranking #3 ranking
PrognosticsPrognostics
SchedulingScheduling
Security of Mobile ResourcesSecurity of Mobile Resources
Remote Diagnostics & PrognosticsRemote Diagnostics & Prognostics
Driver Retention & Insulation from Technician ShortageDriver Retention & Insulation from Technician Shortage
Back-office AutomationBack-office Automation
Real-time Monitoring of Key Vehicular SystemsReal-time Monitoring of Key Vehicular Systems
Regulation ComplianceRegulation Compliance
Screen Unsafe Drivers & Reduce Unsafe Driving PracticesScreen Unsafe Drivers & Reduce Unsafe Driving Practices
Mobile Resource (Driver & Vehicle) Productivity MaximizationMobile Resource (Driver & Vehicle) Productivity Maximization
Cost SavingsCost Savings
Note: Proportions less than three not shown numerically in chart.Note: Proportions less than three not shown numerically in chart.
Safety of Mobile ResourcesSafety of Mobile Resources
Product Demand (Application)Product Demand (Application)
Remote Diagnostics & Prognostics at
$12/month
50%
Remote Diagnostics & Prognostics at
$12/month
50%
Back-office Automation at
$6/month
50%
Back-office Automation at
$6/month
50%
Q: When purchasing telematics technologies, please rank the top three benefits that are most important to your
fleet from the following list below?
Q: When purchasing telematics technologies, please rank the top three benefits that are most important to your
fleet from the following list below?
Purchase Intentions of Advanced Safety Technologies: Not Just About Safety
Purchase Intentions of Advanced Safety Technologies: Not Just About Safety
Source: Frost & Sullivan
Q: How likely you'd be to buy any of these safety technologies…
Q: How likely you'd be to buy any of these safety technologies…
Advanced Safety TechnologyAdvanced Safety Technology
(N=109)(N=109)
Level of Purchase IntentionLevel of Purchase Intention
Active
(Are Considering)
Passive
(Might Consider)No Interest
Tire Pressure Monitoring SystemTire Pressure Monitoring System 55% 39% 6%
Disc Brakes and Larger Drum BrakesDisc Brakes and Larger Drum Brakes 51% 46% 3%
Tractor-based Roll Stability ControlTractor-based Roll Stability Control 35% 57% 8%
Blind-spot Detection SystemBlind-spot Detection System 31% 63% 6%
Driver Drowsiness/Distraction WarningDriver Drowsiness/Distraction Warning 31% 62% 7%
Electronic Stability ControlElectronic Stability Control 31% 61% 8%
Lane Departure WarningLane Departure Warning 31% 60% 9%
Trailer-based Stability ControlTrailer-based Stability Control 29% 57% 14%
Forward Collision WarningForward Collision Warning 19% 69% 12%
Adaptive Cruise ControlAdaptive Cruise Control 18% 69% 13%
Automatic Collision Mitigation SystemAutomatic Collision Mitigation System 18% 69% 13%
Night VisionNight Vision 17% 67% 16%
So What Will be the Next Big Factor for Product Differentiation After ‘Soft Technologies’So What Will be the Next Big Factor for Product Differentiation After ‘Soft Technologies’
OEMs generally tend to focus on one of the 7 key factors (as shown on the right) for positioning of their vehicle brands
For each factor OEMs evaluate whether they want to be ‘best-in-class (BIC)’, ‘amongst the leader’ or ‘a follower’
Those factors which strengthen their brand values are normally bracketed in the ‘BIC’ box (e.g. Volvo for safety, Navistar for telematics, Kenworth for aerodynamics)
This new factor will evolve from the current focus on environment. We already see huge evidence of this factor in modern society
OEMs generally tend to focus on one of the 7 key factors (as shown on the right) for positioning of their vehicle brands
For each factor OEMs evaluate whether they want to be ‘best-in-class (BIC)’, ‘amongst the leader’ or ‘a follower’
Those factors which strengthen their brand values are normally bracketed in the ‘BIC’ box (e.g. Volvo for safety, Navistar for telematics, Kenworth for aerodynamics)
This new factor will evolve from the current focus on environment. We already see huge evidence of this factor in modern society
“Health, Wellness and Well-Being” is Expected to be the Next Key Product
Differentiation Factor for OEMs
“Health, Wellness and Well-Being” is Expected to be the Next Key Product
Differentiation Factor for OEMs
Factors which currently form basis of differentiation among OEMs
Factors which currently form basis of differentiation among OEMs
TelematicsTelematics
Driving ExperienceDriving Experience
Comfort and ConvenienceComfort and Convenience
Lifecycle CostLifecycle Cost
SafetySafety
Vocation ApplicabilityVocation Applicability
Fuel-efficiencyFuel-efficiency
Source: Frost & Sullivan
Frost & Sullivan Conducted a Focus Group, Findings of Which Showed that the 3 Cornerstones – The Body, Mind and Soul – Contribute to Driver’s Definition of HWW
Frost & Sullivan Conducted a Focus Group, Findings of Which Showed that the 3 Cornerstones – The Body, Mind and Soul – Contribute to Driver’s Definition of HWW
The Truck Cabin is a WORKPLACE, Regulations Expected to Enter The Cabin
The Truck Cabin is a WORKPLACE, Regulations Expected to Enter The Cabin
MoodSense of connectivityStress levelsMental healthSense of optimismAttitudeSecuritySafety
MoodSense of connectivityStress levelsMental healthSense of optimismAttitudeSecuritySafety
Personal valuesPersonal fulfilmentSelf image / self actualisation
Personal valuesPersonal fulfilmentSelf image / self actualisation
Sight / vision
Touch & feel
Smell / breathing
Noise
Temperature
Wellness
Sight / vision
Touch & feel
Smell / breathing
Noise
Temperature
Wellness
MindMindBodyBody
SoulSoul
Suppliers Technology Portfolio Analysis (NA): Powertrain, Telematics and Safety Technologies to Experience Most GrowthSuppliers Technology Portfolio Analysis (NA): Powertrain, Telematics and Safety Technologies to Experience Most Growth
TechnologyTechnology Installation%Installation%20052005
Installation %Installation %20152015
RevenuesRevenues2005 (Million $)2005 (Million $)
RevenuesRevenues2015 (Million $)2015 (Million $)
Selective Catalytic Reduction (SCR) (Class 6-8) 0.0 76.0 0.0 2,657.4Automatic Transmission (Class 6-8) 17.8 21.2 566.5 932.4Exhaust Gas Recirculation (EGR) (Class 6-8) 0.0 24.0 0.0 479.5Diesel Particulate Filter (Class 6-8) 0.0 100.0 0.0 412.5Hybrid Electric Powertrain (Class 6-8) 0.0 5.7 0.0 332.7Diesel Oxidation Catalyst (Class 6-8) 27.1 100.0 165.0 247.5Hybrid Hydraulic Powertrain (Class 6-8) 0.0 2.3 0.0 74.1Electronic Stability Control (Class 6-8) 2.0 45.7 6.3 77.2Tire Pressure Monitoring System (Class 6-8) 0.0 47.6 0.0 64.1Integrated Collision Mitigation System (Class 6-8) 0.0 12.1 0.0 63.0Lane Departure Warning (Class 6-8) 0.9 6.6 3.1 13.2Blind Spot Detection (Class 6-8) 0.9 17.1 1.7 12.2Forward Collision Warning (Class 6-8) 0.8 3.6 4.2 11.8
Telematics – Penetration of CV Population 3.8 28.2 957.7 6,500.3
Telematics – Penetration of School Bus Population 2.7 37.4 4.5 82.3
Lea
din
g N
ort
h A
mer
ican
H
eavy
-tru
ck T
ech
no
log
ies
Lea
din
g N
ort
h A
mer
ican
H
eavy
-tru
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no
log
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Fuel Economy, Mobile Resource Productivity, Safety, Regulation Compliance Cost Reduction
Fuel Economy, Mobile Resource Productivity, Safety, Regulation Compliance Cost Reduction
Key Trends and Performance Indicators, (2009-2020)Key Trends and Performance Indicators, (2009-2020)
Trends andPerformance
Indicators
Global Harmonization of Platforms and Technologies
Cap and Trade Operating Environment
Alternative Powertrain Technologies
Rising Distributed Electronics- MRM, Prognostics Less Data More Information
Expansion in Soft Technology Revenues
Diminishing Engine Footprint
Legislative Move Towards Higher GVWR
Trend Towards Vertical Integration
Steady Reduction in Truck and System Form-Factor
BRIC Strategy, NA and EU StrategyLCVs and Mega-trucks (3.5T to <60T)Baseline Globally Harmonized Emission and Safety Technologies
BRIC Strategy, NA and EU StrategyLCVs and Mega-trucks (3.5T to <60T)Baseline Globally Harmonized Emission and Safety Technologies
Greater Reliance on Advanced Turbochargers, Advanced Propulsion TechnologiesGreater Reliance on Advanced Turbochargers, Advanced Propulsion Technologies
Mega Trucks, More Axles per Truck, Revenue Expansion for Chassis Systems, Inter-modal ExposureMega Trucks, More Axles per Truck, Revenue Expansion for Chassis Systems, Inter-modal Exposure
Active Role in Policy Formulation to Benefit From Regulations Active Role in Policy Formulation to Benefit From Regulations
Virtual Integration, Consolidation, Global Diversification, Adjacent Market OpportunitiesVirtual Integration, Consolidation, Global Diversification, Adjacent Market Opportunities
Concerted Strategies Towards Weight Reduction, 3,000 LBs Reduction= 500 Gallons of Fuel, 5 MT of CO2 reductionConcerted Strategies Towards Weight Reduction, 3,000 LBs Reduction= 500 Gallons of Fuel, 5 MT of CO2 reduction
Coexistence of Hybrid, CNG, LPG, Biodiesel , Electric, Fuel-cellCoexistence of Hybrid, CNG, LPG, Biodiesel , Electric, Fuel-cell
Multiplexed Architecture, Electronic Interfaces, Vehicle Networking Technologies, Time and Mission Critical Information DeliveryMultiplexed Architecture, Electronic Interfaces, Vehicle Networking Technologies, Time and Mission Critical Information Delivery
15-20% of Revenues of Truck and System Sales Through Soft Technologies15-20% of Revenues of Truck and System Sales Through Soft Technologies
Questions?Questions?
Sandeep KarGlobal Program Manager – Commercial Vehicles Research
Direct: 416.490.7796Fax: 416.490.1533
Email: [email protected]
Sandeep KarGlobal Program Manager – Commercial Vehicles Research
Direct: 416.490.7796Fax: 416.490.1533
Email: [email protected]