Automotive 09 9 slides to understand 2009 ... Shifting gears to manage a downturn…

1. Automotive 09
DOWNSIDE ADJUSTMENT IN
2nd HALF OF 2009
Michael Klemen
European Markets
August 2009

2. European automotive markets 2 HY 2009
Summary
European automotive overview
• Western European markets are mature while Eastern • There is no swift improvement in the outlook for the global
European countries are still -but much slower-emerging automobile industry. 2009 will be another difficult year for
most auto markets around the world.
• In general activities needed to regain profitability
• Automotive factories in Europe are halting and reducing
•Rethinking of structural expenses and costs inventory, many luxury car markets in Europe are
• Western European production cost structures need to depressed even though some niches (small cars, cheap
decrease eg VW uses twice as many employees as Toyota cars) start to show some small comeback
to generate the same unit of turnover
• Unexpected adaptions like FIAT/Chysler, MAGNA/OPEL,
•Reduce material costs / content costs of PorscheVW… more to come ?
vehicle • European OEMs still dominate the market but have to
•Consumers go for cheaper “interior” - hardly any add ons face decreasing vehicle sales, while a new level of global
• Technology is increasingly key, inside vehicle and interdependence fosters that Asian, Chinese, Indian
inside the business “ brands gain more importance
•We're going from seeing the car as mechanical device with • Car industry suffers from Overproduction: European
electronic enablers to an electronics device with mechanical OEMs stagnated over last few years, while only Asian
enablers." .. tech has become a hook for driving new car sales OEMs increased production in Europe
• US Dynamics have already heavily influenced WE and • Sales fall out in nearly all Truck/Bus areas forces no invest
this will continue for rest of 2009 policy in the segment
• Safe Intelligent Mobility, Green in cars will add to cost • Germany is still the largest vehicle production country in
side (dynamics of concepts like project Better Place (wants to install
Europe with a production output of 6 million vehicles;
around 250,000 charging ports, 200 battery-exchange stations and a control however its output per employee is the lowest
center in the Bay Area by 2012) will appear also in WE on the longer run)
9/8/2009

3. Market downside adjustment
Source: PwC Automotive Institute
9/8/2009

4. German Industrial IT investment data 2008-10
(source Gartner)
2008 2009 2010 2008-2010
Country Vertical 1 Vertical 2 2008 2009 2010 Growth Growth Growth CAGR
Agriculture, Mining and
r
ss demand fo pabilities
Germany Construction Mining 14 13 14 3,8% -2,3% 3,3% 2,1%
B usineAgriculture, Mining and
led ca
nology-enab
Construction Total 14 13 14 3,8% -2,3% 3,3% 2,1%
tech l
is of -2,7%loba1,5%
ag
3.609 rtical analys
continues.
Discrete Manufacturing Computer and Electronic Products 3.707
Ve 3.663 7,5%
IT decision
1,9%
erstand the
of executive
s clearly und eir success.
Industrial and Electrical Equipment
th 5.703 su
5.532 rvey of 5207,2%
5.595 -3,0% 1,1% 1,5%
The majority business technology in
critical ro le of b
rs in Fe7,1%2009
their
Medical Equipment and Supplies 966 ake 976
m
ovation into
997 -3,1% 1,0% 1,5%
Eager to infuse inn ecuOthers oftenManufacturing
tive Discrete bypass 3.989 3.867 3.909 7,1%
changes in 1,1% es
-3,1% 1,5%
these ex 4.505 terprise IT budget ng in 1,5%
operations, ctions whTransportationnEquipment
en selecti g 4.645 En 4.556 7,1%
red with fo recasted cha
-3,0% 1,1%
internal IT fun because the
y 2008 compa
gy suppliers — articularly
Discrete Manufacturing Total 19.040 18.478 09 18.698 7,2% -3,0% 1,2% 1,6%
technoloManufacturingbeing p
Process IT as not
20
-2,8% is un1,2%ly to
ive Chemical, Plastics, Rubber 789 767 777 6,4% like 1,4%
perce
in novative… Consumables 2.910 2.825 exp diture
2.858rprise 6,3% en -2,9% 1,1% 1,3%
effective and Total ente
nificantly
decrease sig
Metal, Wood, Minerals, Paper,
Publishing 846 821 830 6,2% -2,9% 1,1% 1,3%
Petroleum and Coal 588 571 577 or 6,3% 9
April 0 -2,9% 1,2% 1,3%
Pharmaceutical and Medicine 961 932Datamonit
943 6,2% -2,9% 1,1% 1,3%
Textiles and Apparel 311 302 305 6,3% -2,9% 1,1% 1,3%
Process Manufacturing Total 6.405 6.218 6.290 6,3% -2,9% 1,2% 1,3%
Utilities Electric and Gas 5.445 5.543 5.888 11,5% 1,8% 6,2% 6,1%
Utilities Total 5.445 5.543 5.888 11,5% 1,8% 6,2% 6,1%
Germany Total 30.903 30.253 30.890 7,7% -2,1% 2,1% 2,4%
9/8/2009

6. 9/8/2009

7. Creating impact with technology
Hot Automotive Areas Today
- Reduce material costs, content costs
Customer Dealer Fleet Car Rental Wholesalers
CRM / ATP
Customer Relationship Management &
Hot today : OPEX – EBIT - Rethink structural costs Available to promise
Configure Order Sales Scheduling Mfg Scheduling Marketing
Demand Planning / Demand & Supply
Processing Order Bank Order Bank Analysis
Technology Matching
increasingly
Dealer Sales Delivery Lead
key inside Stock Inventory
Analysis Model Center Management
vehicles and
inside the
of vehicle
business INBOUND MANUFACTURING OUTBOUND
LOGISTICS
LOGISTICS
Product Market Stock
Wholesale Replenishment
LLP Definition Offering Orders LLP
Faster new Inbound Logistics
Model ManufacturingDealer Sales
Stock Plant Delivery Model
Developments Consolidation Optimization
Inventory Center
Allocation Late
Warehouse Analysis Configuration
Outbound Logistic
Collaborative
PLM Capacity Operating Material Constraints
Added Value
Added Value
Planning Plan Forecast Management
Services Services
Line Side Material Material Build 2nd Hand Car
Inventory Procurement Refur-
Mgmt releasing Production
Magmt bishmen
Marketplaces Private Mp Portals Tier 1 Tier 2 Tier 3
Portals
9/8/2009

8. Creating impact with technology
The Automotive Production Template
Customer
Order
SAP / ORACLE
Suppliers
WLAN LAN WAN
ERP Seconds Minutes
APO Batch
Production
Suppliers
most likely
Cooperation SAP or ORACLE
Development
Final Layout
Suppliers Order Logistics Flow
Manufacturing Execution System
Pre
Shop Floor Shop Shop SAP Shop
SAP xMII
Production PROP Floor Floor MII(?) Floor
Chassis
Body & Chassis PAINT SHOP
Pre MAIN ASSEMBLY
Press lines FINAL
Production Body shop Electro Coating Engine, Drive Train, Transmission Delivery
Drying ASSEMBLY
Bodyparts Varnishing
Body-in-White
PreProduction
Exterior/Interi
Drive
Buffer
Buffer
Buffer
Buffer
Buffer
Buffer
Buffer
Buffer
or Interior
Engine Train Test
Exterior
Assembly
Messaging/Alert Flow
IE3000
WLAN microsec
Inside the cell
9/8/2009

9. Creating impact with technology
The switch from traditional IT to new mindsets
9/8/2009

10. But Look at the Bright Side of Life !
201y - 201z
+x%
9/8/2009
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