Automotive 2020 I Clarity Beyond the Chaos

Global Insights into the Future of the Automotive Industry

Welcome

David Sedgwick
Editor Automotive News

Sanjay Rishi
Global Automotive Leader IBM

Peter Marks
Chairman, President and CEO Robert Bosch LLC

Dr. David E. Cole

Chairman Center for Automotive Research

Submit Questions Increase Slide Size Download PDF

Download the complete white paper at: www.autonews.com/auto2020

IBM Automotive

Automotive 2020: Clarity Beyond the Chaos

Sanjay Rishi
Vice President and Global Industry Leader

Copyright IBM Corporation 2008

IBM Automotive

Our interviews were global and comprehensive

Interviews by Region Interviews by Industry Segment

Emerging Countries 27% Japan/ Korea 21%

US/ Canada 34% Western Europe 18%

Others 31%

OEMs 42%

Suppliers 27%

125 executives 15 countries Emerging countries accounted for 27%: Brazil, Russia, India and China

69% - OEMs and suppliers Top 85% of auto companies (by revenue), including top 10 Other interviews: associations, government, academia, specialty, futurists
Copyright IBM Corporation 2008

IBM Automotive

Industry leaders, governments, associations, academicians and emerging innovators were active participants
Automotive OEMs Automotive Suppliers Specialty Companies Industry Associations

CAC China

Academia

Other

Copyright IBM Corporation 2008

IBM Automotive

Priority issues of today will have experienced a major shift by 2020

Most important external forces that will impact the industry
Technology Progress Globalization Economies and Markets Sustainability Concerns Government Influences New Consumer 56% 55% 48% 35% 34% 33% 32% 31% 31% 26% 25% Corporate Social Responsibility Global Labor Force Personal Mobility 14% 13% 11% 2008 2020
Copyright IBM Corporation 2008

61% 60%

22% 13%

IBM Automotive

This unprecedented shift will drive the automotive industry to radically differentiate on five key dimensions

Interdependent Ecosystem Integrated Enterprise

Intelligent Vehicle Sophisticated Consumer Dynamic Operations

Copyright IBM Corporation 2008

IBM Automotive

Changes in consumer buying criteria will drive entirely new personal mobility solutions
Rate the Change in Vehicle Buying Criteria 2008 2020
Fuel efficiency Eco-friendly Traffic congestion Personalization Safety Alt. transport modes Lifetime cost of ownership Reliability Brand Price Company values Other Taxation
0
Unchanged

Access to a garage of vehicles

Integration with multi-mode transportation

1
Moderate

2
Significant

Alternative finance models for early adoption

Copyright IBM Corporation 2008

IBM Automotive

The intelligent vehicle of 2020 will be . Green

Every new vehicle will have some level of hybridization Li-ion batteries will be dominant Hydrogen fuel cell penetration will be limited Bio-fuels will continue to evolve

Copyright IBM Corporation 2008

IBM Automotive

Sizeable investments will pay rich dividends towards sustainability.. but expectations will outpace achievements
Global portfolio of new vehicle production in 2020
Fuel (% of total fuel is based on fossil fuels) 2008
95% 80%

2020
60% 65% 40% 20%

Desired Goal 0%

Air (average level of CO2 emissions per vehicle in g/km) 2008

160% 130%

2020
100% 97g/km 70% 40% 0%

Recycle-ability (average % of the vehicle is recyclable) 2008

75% 80% 85% 88%

2020
90% 95% 100%

Copyright IBM Corporation 2008

IBM Automotive

The intelligent vehicle of 2020 will be . Connected

Intersection control violations

Safety

Lane/road departure Road surface conditions 360/distance visions Dynamic route guidance/navigation

Driver Assistance

Data downloads (entertainment, media, home network, personal preferences) Electronic payments - toll, drive thru, parking, road pricing Remote vehicle diagnostics, prognostics and self healing

Service

Transfer of warranty based data Connected customer relations management

Copyright IBM Corporation 2008

IBM Automotive

Availability of skills will drive proactive flexibility

Product Development Footprint
Core vs. application development Innovation distributed among R&D centers Ability to shift work

Manufacturing Footprint
Greater flexibility for demand Broader/scalable reach Reliant on the quality of skills, not quantity

Critical Footprints Optimized

Emerging markets as source Multi-generation requirements Sharable among companies and industries

Skill Base Footprint

Copyright IBM Corporation 2008

IBM Automotive

The emphasis on priority skills varies across regions based on resource availability and market maturity
Rate the most critical skills for the industry in 2020 global and by region
Engineering Product Planning Management Software Development Design Marketing / Selling Service Technician Finance Procurement Production 0% 20% 40% 60% 80% 100%
U.S. / Canada Western Europe Japan / S. Korea Emerging Countries Global

Copyright IBM Corporation 2008

IBM Automotive

The multiplex workforce will be driven by the need to excel in the global environment
Primary Capability Challenges Facing the Industry between 2008 and 2020
Building leadership talent Fostering a culture that supports learning/development Knowledge transfer to inexperienced employees Rotating leadership talent across business units/geos Attracting employees to work in the industry Communication skills Re-skilling the workforce Leveraging the diversity of the workforce Rapidly getting new employees up to speed Developing basic skills across the employee base
1 2 3 4 5

A multiplex workforce enables the diversity of skills and culture, and unites them into common goals and direction

Limited
Sources: IBV Analysis, Automotive 2020 Global Interviews (n=103),

Best

Copyright IBM Corporation 2008

IBM Automotive

The need to execute in interdependent ecosystems will be critical and requires the highest degree of change (+48%)
Global Consumers Other Industry Eco-systems
Government/Transportation Consumer Electronics

Automotive Social Networks Energy Geographies

Other Industries Telco Software Financial Services Biotechnology Communities

Source: IBV Analysis, Auto 2020 Global Interviews (n=103) Copyright IBM Corporation 2008

IBM Automotive

New business models will emerge at the intersection of industries

Government/ Transportation

Consumer Electronics

Social Networks

Automotive

Geographies

Other Industries

Energy

Communities

Copyright IBM Corporation 2008

IBM Automotive

New business models will emerge at the intersection of industries

Data storage, analysis and disbursement for connected vehicles Aggregation and synchronization of personal cyber-self available anywhere

Government/ Transportation

Consumer Electronics

Social Networks

Automotive

Geographies

Other Industries

Energy

Energy storage and brokering

Communities

Ultra fast charging

Copyright IBM Corporation 2008

IBM Automotive

The time is now organizations must act aggressively, actively and with immediacy
Advance Mobility Transform Retail Simplify Complexity Partner Extensively Execute Globally

Respond to the redefined reality of personal mobility Connect with the new consumer and build relationships through a new retail value proposition Harness the strength in standardization and commonality Seek out broader partnerships within and outside the industry to innovate Architect an optimal global presence and a unique socially responsible culture

Copyright IBM Corporation 2008

IBM Automotive

Automotive 2020: Clarity Beyond the Chaos

Sanjay Rishi
Vice President and Global Industry Leader

Copyright IBM Corporation 2008

Peter Marks
Chairman, President and CEO Robert Bosch LLC

Automotive 2020 Webcast, September 2008

Defining Mobility and the Industrys Future in 2020

Peter Marks Chairman, President and CEO, Robert Bosch LLC

25

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Automotive 2020 Webcast, September 2008

Green Powertrain Technology

Gasoline direct injection

Clean diesel injection

Ultra-efficient alternators

Start-stop Systems
26

FlexFuel

Electrical system management

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Automotive 2020 Webcast, September 2008

Migration Path for Powertrain Electrification

Electric Vehicle

Electric Vehicle w/ Range Extender

Fuel-Cell Vehicle Plug-In Hybrid

Hybrid Vehicle

2005

27

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Automotive 2020 Webcast, September 2008

Energy Scarcity
Exploding energy prices Shorter commutes Increasing demand for public transportation Trend towards mega cities Decreasing numbers of cars Change in vehicle mix Change in ownership models

28

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Automotive 2020 Webcast, September 2008

Combined Active Passive Safety (CAPS)

Driver assistance
Radar-based systems
Occupant protection

Active safety
Vehicle stabilization Braking functions Vehicle dynamics

Ultrasound-based systems
Pedestrian protection

Video-based systems

Navigation systems

Display systems

Car-to-x communication

Passive safety

Communication
. Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved

Automotive 2020 Webcast, September 2008

The Sensitive Car

Predictive Emergency Brake

Parking Assistant

Advanced rollover sensing

Early pole crash detection

Secondary crash mitigation

Remote Diagnostics

30

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Automotive 2020 Webcast, September 2008

Vision of the future: dominant global trends

Accelerated global integration

Need to protect the environment and conserve resources

Energy resources becoming scarcer and more expensive

31

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Automotive 2020 Webcast, September 2009

World market Low Price Vehicles

China: 34 % India: 11 % other countries: 55 %

China: 37 % India: 17 % other countries: 46 %

2007
market volume 10.4 million automobiles

2011
market volume 13.1 million automobiles

32

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved

Thank you for your attention.

33

Sept. 2008 | 2008 Robert Bosch LLC and affiliates. All rights reserved.

Dr. David E. Cole

Chairman Center for Automotive Research

Download the complete white paper at: www.autonews.com/auto2020

January 19 22, 2009

autonews.com/worldcongress

Questions & Answers