Nafta renegotiation and the significance to the automotive supply chain

NAFTA RENEGOTIATION AND THE SIGNIFICANCE TO THE AUTOMOTIVE SUPPLY CHAIN

The Trump administration continues to report that U.S. trade deals will work for all Americans, but how that will look for automotive OEMs and their suppliers is still to be determined. Although a full withdrawal from the North American Free Trade Agreement (NAFTA) has now moderated to a renegotiation, it is clear that change to NAFTA is likely. President Trump has publicly stated he is committed to renegotiating NAFTA, and if this fails he’ll give notice of the United States’ intent to withdraw from the trade agreement.

While the possible implications on automotive entities are not yet entirely clear, it is certain that U.S., Canadian and Mexican automotive supply chain participants should carefully evaluate the repercussions of such change. The 23-year-old agreement could be modernized to include e-commerce and other aspects that didn’t exist at the time of its creation. It could vary by country, product type or technology.

How long renegotiation will take is open for debate, but the automotive industry needs to be proactive in its preparation, to ensure a competitive position. This should include an understanding of the following questions relative to the current state of an organization:

  • What are the likely effects on the automotive supply chain, and who will feel the greatest impact?
  • How much exposure do you have based on operations, suppliers and customers in affected regions?
  • How does your current manufacturing footprint compare to competitors?
  • What are the areas of risk based on your footprint and your supplier and customer profiles?
  • What mitigation strategies should be considered? Some examples include: a shift in production; final assembly; current process and equipment versus investment in automation; customer diversification and partnership; or M&A opportunities.
  • What impact might this have on the regional workforce (e.g., resource availability and labor rates)?
  • What advantages can you currently highlight in the short term that may provide a competitive edge?
  • How much local production is available for your product and/or service in country of manufacture, giving you the opportunity to alleviate import/export exposure?

Duckerfrontier dirt report – spring 2017

DUCKERFRONTIER DIRT REPORT – SPRING 2017

Optimism was high at the 2017 ConExpo/ConAgg show in Las Vegas, predicting that the future is bright for the Heavy Equipment industry. After several challenging years marked by a global decline in demand, equipment manufacturers are starting to believe that the market has begun the process of recovery. One indicator of this is that dealer optimism has increased by 48% since 2015, driven by an increase in planned infrastructure spending. Additionally, projected increases in commodity pricing, and oil and gas are expected to spur the need for mining and drilling equipment.

Product Innovation

Equipment manufacturers are busily preparing to meet the rapidly changing needs of the re-energized market. The top concern expressed by equipment owners is the difficulty finding qualified operators. According to the Bureau of Labor Statistics, while the demand for experienced operators will increase at a rate of 10% per year, the number of operators entering the market in recent years has decreased dramatically. Equipment manufacturers are responding by offering traditional services, such as operator training.

Additionally, the number of innovations associated with supporting and improving the performance of operators is staggering. Arguably, geo-positioning companies – including Topcon and Trimble – stole the Las Vegas show. Innovative technologies offered by companies such as these are being incorporated into nearly every unit of new equipment. Furthermore, many of the equipment manufacturers are starting with the base information provided by a positioning company, and building on it, to provide end users with a fully interactive operating experience.

In addition to the cab-based systems that are frequently incorporated into leading heavy equipment brands, prototypes for new user interfaces for operators were also on display. Helmets containing Mixed Reality displays will eliminate the need for the operator to shift attention from the worksite to the in-cab display during digging. This type of technology is expected to improve production efficiency, while also enhancing jobsite safety.

Another way to improve efficiency is to increase equipment versatility. Several manufacturers have introduced completely new equipment types, to allow end users to get the most out of each unit. One example is JCB’s Teleskid, which allows the already versatile skid-steer loader to function like a telehandler. This is perfect for applications requiring high-reach operations. Currently, the telehandler market is dominated by rental equipment, but with this increased versatility, the Teleskid is likely to be a machine that end users will add to their permanent fleets.

CNH also had a hybrid machine concept on display. This machine design project – dubbed project Minotaur – combines a fully integrated compact dozer with a skid-steer loader. This machine allows the end user to seamlessly switch between the functionality of a traditional skid-steer to a complete dozer, with a six-way blade and optional laser leveling.

These machines target the general Construction and Agricultural markets, and address a need to own the smallest number of units possible, while achieving maximum functionality. The availability of a wide variety of attachments allows many in these industries to bring a single unit to a jobsite, to complete a variety of load-and-carry, excavation and grading functions.

Service Innovation

The excitement at the show focused not only on the equipment side of the industry. The depressed construction activity of the past two years has caused many end users to hold on to existing equipment a lot longer than usual. This buildup of older equipment has created a need for additional service and parts support, and has produced an opportunity to use technology to improve the lives of today’s equipment users.

Perkins Engine has responded to the need for improved support by introducing a mobile phone App that allows the user to track each engine, and bring critical engine data with them anywhere. Perkins reps explain that this comprehensive tool will allow the user to track maintenance schedules, check fault codes and identify parts required for service. Future generations of the tool will link to an online order placement function, allowing parts to be ordered with the touch of a button on the jobsite.

This year’s ConExpo/ConAgg show made it apparent that tomorrow’s construction industry will look very different from yesterday’s. As equipment becomes more intelligent, manufacturers can focus on creating a dynamic experience for the owner-operator, versus simply selling a piece of equipment. The heavy equipment industry is becoming an increasingly attractive option for millennials entering the workforce, in search of a career in an innovative and rapidly progressing field.

Duckerfrontier predicts that the mining industry’s slow, steady rebound will continue

DUCKERFRONTIER PREDICTS THAT THE MINING INDUSTRY’S SLOW, STEADY REBOUND WILL CONTINUE

Commodity prices have shown improvement over 2015 and early 2016 levels

  • Prices of metals and minerals such as aluminum, copper, iron ore, lead and zinc are up 9% in the first quarter of 2017, as compared with the fourth quarter of 2016
  • Precious metals such as gold, platinum and silver have increased in value by nearly 2% over the same period
  • Mines will not simply return to business as usual as the industry improves, as all are under considerable pressure to significantly increase operating efficiency
  • Technologies that assist in reducing cycle times, increasing precision and reducing staff size requirements will be important investments for mines, moving forward
  • Pent-up demand for new equipment is likely to translate into wins for heavy equipment manufacturers and dealers in coming months

Duckerfrontier forecasts 6% growth for low slope roofing market

DUCKERFRONTIER FORECASTS 6% GROWTH FOR LOW SLOPE ROOFING MARKET

  • DuckerFrontier forecasts the low-slope roofing market will reach $1.8 billion in 2017 (manufacturer market value, roofing material only)
  • Aging stock of facilities and replacement rate of 20 year membranes in the market; weather and occupancy upgrades
  • Energy cost driving conversion to some single-ply technology (PVC/TPO) vs. asphalt-based systems
  • Increased focus on sustainable building design and super-insulated roofs add to system value (typical R20 of insulation migrating to R60)
  • Construction market and infrastructure activity continuing to expand through 2019
  • TPO (value) and PVC (premium) share trajectory will exceed EPDM (poorer energy performance)
  • Extensive capacity has been added as competitors expand offerings and address regional demand conditions with 11 new plants throughout North America since 2012

Duckerfrontier forecasts 7% growth for pitched roofing overall, but “premium” segment leading

DUCKERFRONTIER FORECASTS 7% GROWTH FOR PITCHED ROOFING OVERALL, BUT “PREMIUM” SEGMENT LEADING

  • Continued trend toward high value/premium materials – double-digit expected (12% in 2017)
    • Regional growth markets (e.g. in the South and West)
    • Overall aesthetics
    • Innovation in aesthetics to mimic wood/ slate
  • Leading shingle manufacturers continue to expand “premium” portfolio with asphalt shingle products, as well as alternative systems (e.g. synthetics, metal)
  • Code/trend toward “cool” roof
  • Delayed replacement during the economic decline (pent-up demand)
  • Continued growth in new construction starts

China’s auto industry: from charcoal-powered cars to full autonomy

CHINA’S AUTO INDUSTRY: FROM CHARCOAL-POWERED CARS TO FULL AUTONOMY

Special Report: China’s Auto Industry by Automotive World

Imagine a scenario in the not-too-distant future – perhaps five to seven years from now – in which a significant number of the passenger vehicles roaming the streets of Berlin, Paris or Los Angeles were made in China.

It may sound far-fetched, but China is by far the largest producer of vehicles in the world. Since 2009, annual vehicle production has exceeded that of the EU. By another measure, output was high than that of the US and Japan combined. In 2014, the total number reached more than 23.7 million, accounting for 26% of global vehicle production.

The number of registered cars, buses, vans, and trucks on the road in China reached 62 million in 2009, and is expected to exceed 200 million by 2020. It is estimated that China’s car market will grow tenfold between 2005 and 2030. This seems eminently possible, since, according to statistics from the China Automobile Industry Association, 2016 sales were at 28 million, an increase of about 14% over the same period in 2015.

To Read the Full Article Visit Automotive World – Click Here

Duckerfrontier forecasts significant growth for water infrastructure products

DUCKERFRONTIER FORECASTS SIGNIFICANT GROWTH FOR WATER INFRASTRUCTURE PRODUCTS

DuckerFrontier Forecasts Significant Growth for Water Infrastructure Products:

  • Aging systems – there are up to 3 million miles of water and wastewater pipe in the ground
  • More than 25% of the nation’s drinking and wastewater infrastructure is over 50 years old
  • DuckerFrontier’s recent survey of water municipalities indicate adoption asset management tools and better tracking of break rates
  • $1 trillion of investment in water and wastewater infrastructure will be necessary
  • President Trump and the new administration have outlined a bold agenda for investment in infrastructure

Duckerfrontier to attend 2017 conexpo-con/agg

DUCKERFRONTIER TO ATTEND 2017 CONEXPO-CON/AGG

Troy, Mich., March 2, 2017 – DuckerFrontier, a premier business-to-business growth consulting and industrial research firm, will attend the 2017 CONEXPO from March 7-11 in Las Vegas, Nevada. With more than 50 years of experience, diligently working with the Construction and Heavy Equipment industries, DuckerFrontier’s experts continue to be a principal source of insight and advice in the field.

CONEXPO-CON/AGG is a leading construction exhibit where every major construction industry is represented. No other show’s attendees represent more sectors of the construction industry. New products and technologies will be introduced by more than 2,500 exhibitors from all major construction industries, including asphalt, aggregates, concrete, earthmoving, lifting, mining, utilities and more. As the emphasis is on the future, CONEXPO-CON/AGG primarily focuses on cutting-edge technologies and products that increase efficiencies for businesses, and bring attendees to the forefront of the construction industry.

The Heavy Equipment industry is currently facing a global recession, which has resulted in a steep decline in equipment demand. At this year’s CONEXPO, DuckerFrontier’s Heavy Equipment team of experts will be exploring the innovations on display that address current industry challenges and trends.

Scott ulnick, board chairman and managing principal, duckerfrontier confirmed for fuel economy detroit

SCOTT ULNICK, BOARD CHAIRMAN AND MANAGING PRINCIPAL, DUCKERFRONTIER CONFIRMED FOR FUEL ECONOMY DETROIT

Scott Ulnick, Board Chairman and Managing Principal, DuckerFrontier has been confirmed as a moderator at Fuel Economy Detroit.

Scott Ulnick is Board Chairman and Managing Principal of DuckerFrontier, a market research, strategic consulting and transaction advisory firm. He joined the Detroit office in 1990 following a career with Unisys Corporation where he held positions in marketing, product development and program management.

Mr. Ulnick routinely consults leading industry and investment concerns on strategic improvement, growth initiatives and buy side transactions. Industries of particular expertise include automotive, commercial vehicles, construction products/materials, aerospace, materials & material forming, consumer durables, and industrial products in OE and aftermarket positioning.

AUTOMOTIVE MEGATRENDS conferences are designed to connect and inform the stakeholders who are shaping the automotive industry of tomorrow.

Fuel Economy Detroit brings together the stakeholders tasked with creating the fuel-efficient and lightweight cars of tomorrow.

To register for this event, please go to http://fueleconomydetroit.com/#tile_tickets

How to win in your industrial market

HOW TO WIN IN YOUR INDUSTRIAL MARKET

DuckerFrontier delivers in-depth market research, strategy consulting and transaction advisory services to support industrial businesses of all sizes, globally. DuckerFrontier’s market-driven insights and analytics help companies manage the dynamic business models for OEM equipment, MRO spending, integration and system opportunities, and global partnerships in manufacturing.

DuckerFrontier helps you to make the right decisions (where to play):

  • Capture trends and market needs in their early stages to anticipate technological shifts, reduce time-to-market and keep competitive edge
  • Forecast market growth
  • Map customer-supplier relationships and identify incumbent suppliers
  • Identify opportunities (e.g., improved value proposition, unmet needs) and
    threats (new entrants, competing technologies/materials, etc.)

DuckerFrontier helps you to map out how to win in your market:

  • Optimize your market impact with current portfolio: expand in new geographic markets, touch new customers, etc.
  • Expand offerings with new products, augment your technological IP, assess innovation concepts and identify associated market potential
  • Profile key influencers within customers’ organizations and master their decision process
  • Listen to customers’ voices and improve the customer experience
  • Monitor your competitors’ activities and strategic moves
  • Develop partnerships to leverage synergies
  • Identify and evaluate acquisition candidates