European Car and Light Commercial Vehicle Production Outlook November 2013 SMMT, the 'S' symbol and the ‘Driving the motor industry’ brandline are trademarks of SMMT Ltd Contents Introduction and analysis overviews: Individual vehicle manufacturer reviews: About this report 3 BMW 38 Executive Summary 4 Daimler 41 Demand Side Perspective 11 Fiat (incl. Chrysler) 44 Production Outlook Overview 13 Ford 49 Country Rankings 28 GM 51 Alternative Scenarios 31 Honda 54 Disclaimer 36 Hyundai-Kia 55 PSA 56 Renault-Nissan-Dacia 61 Suzuki 66 Tata – Jaguar Land Rover 67 Toyota 70 Volkswagen (incl. Porsche) 71 Volvo 78 Aston Martin 80 EUROPEAN CAR AND LCV PRODUCTION OUTLOOK REPORT November 2013| Page 2 About this report This is the fifth short version of the 2013 Production Outlook report from AutoAnalysis. In January we produced our full “Foundation” report and readers are referred to this report for full details on the recent history and developments at each VM in particular. The aim of the shorter reports is to focus on the Production Outlook volumes and developments at the VMs since the previous report. This means this report and the remaining reports in 2013 will be much shorter than the Foundation report. The views and projections contained in this report are those of the author, Ian Henry of AutoAnalysis. They do not represent an official SMMT view. The projections regarding new model timings, changes in production locations and the associated production volumes shown here have been compiled on the basis of information from a variety of sources. In most cases, the vehicle companies do not provide official information on which models will be made at which plants, nor do they provide detailed information on future volumes and timings. They have been prepared on the basis of judgments made by AutoAnalysis, taking into account the information, opinion and inside from a range of industry, press and analyst sources available at the time of compiling this report. Ian Henry of AutoAnalysis will gladly address SMMT members’ specific questions on this report. Readers’ comments and questions on this report will be greatly appreciated. Please e-mail: [email protected]. EUROPEAN CAR AND LCV PRODUCTION OUTLOOK REPORT November 2013| Page 3 Taking Russia out of the equation, we have 2012 European production down Executive Summary at just over 16.6mn units, a fall of c1.75mn units from 2011. We now see European production without Russia rising to 17.82mn in 2013 – as noted Recent sales fall reversed? above, we see Spain, Turkey and the UK contributing much of this recovery. Although 2012 and the first 8 months of 2013 had seen steady falls in European production, excluding Russia, has clearly started to recover, despite registrations across the EU, there are signs that the bottom has been reached the continued sales falls across EU markets for much of the year. This rise in and the long awaited upturn has begun, 2012 had seen a fall of 8.2% in EU27 production reflects continued strong exports of premium brands (especially car registrations, something which was directly reflected in the fall in JLR and the German brands), the supply of models from Spain to emerging production which Europe witnessed last year. The first eight months of 2013 markets by PSA, the strength of LCV demand (underpinning production in saw this decline continue, although July 2013 actually saw a year-on-year Spain and Turkey especially) and general pipeline filling by the VMs with a increase of 5%. However, this was a short-lived phenomenon, and the figures series of new models. for August showed a 5% fall for the month and a year-to-date fall of 5.2%. In addition, new models from Dacia (including at its plant in Morocco which we Throughout this period, the UK remained the only major market showing signs treat as part of Europe from a production point of view) and strong demand for of growth, with a rise of 10.4% year-on-year in the first eight months of the Skoda and Hyundai-Kia models also highlight the increasing role of new year; even in Germany, so long the engine of growth in Europe, registrations “value” brands, at the expense in many cases of traditional volume brands. have fallen by 6.6% in the year to date. Just as recent production volumes have been underpinned by premium brands In September and October, however, the market began to turn around – the and some newer entrants, we also expect the main winners in the near term UK continued to grow and Spain was boosted (possibly only temporarily) but will be the same companies. Thus we expect most of the growth will come government-supported incentives which resulted in a year-on-year growth of from the premium brands from Germany, JLR/Mini/Nissan in the UK, the value more than one-third. Total EU sales in rose 5.4% in September and 4.7% in brands (ie Dacia, Skoda and Hyundai-Kia) and also LCVs, especially the October. expanding range from Ford. Ford will also be boosted by rising production in Once again in October, the UK continued to grow, this time by 10.2%; in Russia. France and Germany, the other major markets, there was also a modest rise in However, we expect to see a mix of (at best) stable and in some cases October, both growing by just over 2% although they still show year-to-date continued decline in production at the volume VMs. Opel/Vauxhall is expected declines, by 7.4% in France and 5.2% in Germany. to see total production dip below 900,000 pa through to 2015 (with its recovery dependent on the new Astra and Corsa models after this date). Citroen is likely to fall similarly, while its sister brand Peugeot will also fall in the long run, Production recovering … despite its recent production boost from the 208 and 2008. Fiat will have a tough period until its expanded 500 range comes on stream – and it is possible Our total for 2012 European production including Russia is c18.12mn, a fall of that funding restrictions could mean this will be delayed and its volumes could around 1mn from 2011. We now see that most of this fall will be recouped be lower than projected in this report. by the end of 2013, with production including Russia rising to nearly 18.98mnn. This rise is driven by a combination of factors, partly Russia, but There will also be a number of exceptions to this negative picture at the more crucially a recovery in production in Spain and continued rises in the UK volume VMs. This will mainly in the crossover segments, eg the B-segment and Turkey. EUROPEAN CAR AND LCV PRODUCTION OUTLOOK REPORT November 2013| Page 4 models from PSA (2008) and Renault (Captur) and, as noted above, emerging Fiat’s reorganisation plans are, however, taking time to be fully implemented, markets models (301 and C4 Elysee) made in Spain by PSA. partly because of financial restraints on the company ahead of the full takeover of Chrysler (Fiat needs access to Chrysler’s cash resources to implement its new strategy. Problems with the design and specification of several of the new Modest restructuring finally under way Alfa models which are integral to the Alfa brand’s revival have delayed the new models’ launches and this will have a direct impact on Alfa volumes which we The decisions in 2012, by GM, PSA and Ford to restructure and start cutting now see as not growing until 2015 at the earliest. excess European manufacturing capacity over the next few years suggest that the volume VMs have finally faced up to the reality of declining demand (in the Rather than close factories, Fiat is reorganising its Italian operations, changing face of both premium brands and new value brands starting to encroach onto the production allocation between its four main Italian plants. This reflects a their traditional territory), increased competition and the cumulative impact of new strategy which focuses on the premium Alfa and Maserati brands and a substantial financial losses sustained over several years. much slimmed down Fiat range, based on the 500 and Panda models; whether this strategy succeeds remains to be seen, especially given the continued While these three VMs are beginning their structural problems through delays to the new Alfa product programme. capacity cutbacks, (Ford has closed Southampton in the UK and will soon close Genk in Belgium, Opel is closing Bochum in Germany and PSA is Fiat plans to use its Italian, Serbian, Polish and Turkish plants as global supply closing Aulnay in Paris), other volume VMs are following a different route. points, a strategy which is new to the company. This will involve selling vehicles under the Jeep – and Ram – names from plants in Italy and Turkey, Fiat and Renault have embarked on restructuring plans which for now exclude and possibly the other plants too. If this succeeds, it may well be able to hold plant closures. Renault announced further investment in Spain at the end of onto its existing manufacturing footprint, but if it does not then closures and last year and this year it has confirmed additional investment in its Douai plant production cutbacks which appear to be off Fiat’s agenda at this point in France as well as plans to bring production of the Nissan Micra to France, to may well be required. The Fiat Ducato van has been launched in North the Flins plant near Paris. America under the Ram name in Q4/2013. Renault commitment to its Spanish car and powertrain operations includes the This strategy – of investment for growth rather than cutting capacity – is production of new engines and two new models at the Palencia factory, consistent with the announcement in early 2013 from Renault, committing it to alongside the new B-segment crossover, the Captur, which is now in growing production in France to 710,000 by 2016 in exchange for its unions production at the Valladolid factory The Captur is likely to be boosted later agreeing to a range of cost cuts and 7,500 jobs.