IBT Partners has specialised knowledge in the automotive sector and provides financial, business and technical consultancy services.

The automotive industry has specific challenges that need appropriate expertise. Our know-how helps you achieve your international business and trade development goals. We offer you sector-specific knowledge, as well as our contacts and opportunities for networking.

Our services and solutions are tailored to the needs of each of our customers, please see Government and Corporate for more detailed information.

Read more about the automotive sector:

• Background
• Current challenges
• Opportunities

Automotive background information

The automotive sector has changed more in the last decade than over the previous fifty years. While the economic crisis hit hard, the subsequent recovery has been swift and dramatic, pulled by relentless demand from emerging markets, notably India and China. According to PwC¹, the global number of units will rise from 66 million in 2009 to 93 million by 2016: 95% of this increase will come from emerging markets. The industrial delocalisation of the last twenty years has reached a new phase - these markets are now the new Car El Dorado.

Current challenges in the automotive sector

The automotive industry has faced various macro and micro environmental challenges in the past few years that are transforming the sector.

Record volumes in global auto sales are expected in 2011, following a successful recovery since spring 2009, and steady acceleration throughout 2010. This growth fed on the scrappage schemes, but the automotive industry has steadily regained self-sufficiency and is today driven by improvements in the labour markets rather than by government incentives. The pace of job creation, which is the key driver of worldwide car sales, will help the US and Europe to re-establish themselves in the automotive market again¹.

Opportunities in the automotive sector

In order to keep pace with developments in the automotive sector, it is important to have access to actual, accurate and complete information and in-depth expertise. We will help you to address all important issues, including trends, key success factors, advancements and innovations, supply and demand development, operational and financial risks, benchmarking, as well as regulations and opportunities for funds and grants.

Some of the key opportunities and trends in the automotive industry include:

• Vehicle electrification

  → For electric vehicles, the world seems divided between optimists and those who argue that costs and lack of coordinated policy condemn electric vehicles to a niche. Highly pessimistic predictions claim that by 2016 the production of electric cars will constitute just 1.5% of global production¹, whereas optimists expect by 2020 that 50% of the cars will be at least partly charged electrically⁵.
  → Numerous reports highlight the heavy cost that a full development and employment of a vehicle electrification infrastructure would incur. However others debate this necessity for expensive infrastructure and cite the sprawling, oil-rich city of Houston as an antidote. Houston is embarking on an ambitious program of vehicle electrification. 
  → Batteries and energy storage are at the heart of the business. While scepticism remains, recent technological advances have proven higher storage levels, leading some to suggest battery prices could fall by as much as 60% by 2020⁴.
  → There is a clear lack of industry collaboration, essential for optimising R&D and pushing innovation. The recent bill proposed by the US senate to switch half of America’s cars and trucks to electric power by 2030 gives hope for increased collaboration. 

• EU development

  → The EU as a whole is the world’s largest producer of motor vehicles. Historic European prosperity is based on the automotive industry, which is not only a major employer of skilled workforce, but also a key driver and investor in R&D. The automotive industry represents a large share of the EU’s GDP, with exports exceeding imports. The European Commission has stated clear objectives to further support the automotive industry by simplifying the necessary testing procedures².

• China's development

  → Twenty years ago, few would have expected China to become a worldwide player in the auto sector, yet its global share in auto production has risen from 0.2% to 20%. As a single country, China is the world's biggest producer, but also the world’s biggest consumer. Moreover the combined value of car purchases in the BRIC countries outnumbers that of Western Europe and Japan, accounting for approximately 30% of global car sales. Yet, China’s vehicle penetration remains low at 40 vehicles per 1000 people, compared with average of 673 vehicles per 1000 people in the G7 countries. Furthermore, global trends suggest that once a country reaches an average income per capita of between $4000 and $6000, it enters a car sales boom. China having recently achieved this benchmark, looks set to dominate global automotive demand for some time¹.

• India's development

  → India follows China’s example as one of the top car producers in terms of volume, but with one of the lowest vehicle penetration rates in the world. Currently, vehicle penetration in India is only 14 vehicles per 1000 people, lagging behind Africa’s average at nearly double this figure. The opportunity for car sales will dramatically increase in India over the coming decade, notably for demographic reason. India has one of the youngest populations, with half of its inhabitants below the age of 25. These potential future buyers represent twice the size of the US and nearly two thirds of the current global vehicle consumers¹.

• US development

  → In the US, vehicle sales increased by 11% in 2010. This figure is expected to improve significantly in the next year. The US fleet has never been older and Americans urgently need to replace ageing vehicles that are exceeding 10 years¹.

  
  

1) PwC. 2011. Automotive. Online at: http://www.pwc.com/gx/en/automotive/index.jhtml

2) European Commission, Entreprise and Industry. 2010. Automotive Industry. Online at: http://ec.europa.eu/enterprise/sectors/automotive/index_en.htm

3) Quickashauto.com. 2011. Automotive Industry Review: 2010 edition. Online at: http://www.quickcashauto.com/Automotive-Blog/the-auto-industry/2011/01/07/automotive-industry-review-2010-edition

4) Steinhubl, A. and Leis, J. 2010. Affluent likely to lead charge for electric vehicles. Houston Chronicle

5) Mathies, G. et al. 2010. The e-mobility era: Winning the race for electric cars. Bain Brief

Contact us

If you would like to know more about our automotive sector expertise, please contact us at
auto@ibtpartners.com
for additional information.