【正文】 tain sales with large rebates and easy credit in the US and increasingly in Europe. However, these strategies have seriously pressured profits. ? DaimlerChrysler reported in July 2020 that ine fell worse than it has since the industry‘s last poor earnings period in late 2020. ? Mitsubishi promoted easy credit, including loans that deferred payments for a year to consumers with weak credit but have recently rescinded this promotion due to profit erosion. ? PSA‘s profit was hit mostly due to the rise of the Euro, especially against the British Pound and Brazilian Real, Brazil being where it has one plant. ? Some automakers are attributing this span of poor earnings to the bottom of the current cycle of slowdown, however many are still seeking structural improvements and better pricing power to buffer this cycle. Company Earnings Status Issues General Motors Operating profit fell 87%, Announced earnings August 8, 2020 Intense US price war severely pressured profits Daimler Chrysler Second quarter 2020 operating profit fell 62% Chrysler losses, US price war, Mercedes sales slacking Renault Operating profit fell €588 million. Last reported 7/24/03 Global sales decline (%) in first half。3,100 163。 Regional IT Spend Forecasts ? Automotive Industry IT Trends Automotive IT Services Industry: Competitive Profiles Automotive IT Services Market: BearingPoint Alliances Sources and Contact BUSINESS INTELLIGENCE GROUP Executive Summary Automakers are currently faced with slower sales, over capacity and declines in profitability. Big 3 are losing market share to Japanese automakers. ? Toyota, Honda and Nissan increased their . sales and market share in the first half of 2020, while the Big Three manufacturers (GM, Ford, DaimlerChrysler) saw their sales decline despite spending heavily on incentives. ? Currently the global automotive industry has too much capacity (roughly 30%) and as sales fall, the problem continues. ? Car prices have been falling making already thin margins even more pressured. The global automotive industry is faced with more petition, greater price transparency, rising customer expectations and quality improvements, making the pressure even greater on price and profitability. China presents the best opportunity for automakers due to increased government incentives and cooperation, cheaper labor, and proximity to a large population of potential consumers. ? China continues to make progress towards a market economy which has led to global businesses, like automotive panies, trying to ramp up in order to tap into the country39。s large marketplace of consumers. A year after entry into the WTO, in 2020, China‘s automotive industry produced motor vehicle units (38% growth pared to the year before). IT Issues: Industry in survival mode, pressuring spending。12,113 Pension and healthcare source: MSDW, Based on Mmgt. Discussions Total US Pension Fund and Healthcare Liability (in MM) BUSINESS INTELLIGENCE GROUP US Automotive Market: Slowing, but Still the Largest The US auto industry is the most important one to the global industry since there were registrations in the United States in 2020 (down by more than 3% from the all time high in 2020). The US market for light trucks and SUVs ( registrations in 2020) surpassed the car market in 2020 ( registrations). ? The low level of US fuel taxes boosted SUV sales far more than in any other country, although rising oil prices and environmental legislation could reduce sales. ? In 2020, roughly onefifth of the cars, light trucks and SUVs registered in the United States were foreign. California has the highest rate of passenger car purchases, accounting for roughly 13% of the total. ? The US industry, regardless of its high numbers, is currently saturated. The stock of passenger cars per head was the ninth largest in the world in 2020. With nearly 500 cars per 1000 of the population, the US has more cars per head than the United Kingdom, but slightly fewer than Italy and Germany. ? Car usage is extremely high in the United States over other countries in the world. The average person in the United States travels about 9,000 km per year, pared to 6,000 km in Western Europe and 4,000 km in Japan. BUSINESS INTELLIGENCE GROUP Big 3 Continue to Lose Market Share to Japan As the automotive industry gets more petitive, American consumers are buying more Japanese automobiles due to their reputation for quality and value. Toyota, Honda and Nissan increased their . sales and market share in the first half of 2020, while the Big Three manufacturers (GM, Ford, DaimlerChrysler) saw their sales decline despite spending heavily on incentives. This trend started in 1998, when domestic manufacturers started to lose nearly 10 points of share, and the Japanese gained nearly 5. ? Industrywide, car and lighttruck sales were down % through June, to . However, the three biggest Japanese manufacturers sold 100,000 more vehicles, and the domestic Big Three sold 200,000 fewer. ? Market share for all Japanese brands is at an alltime high of %, and domestic brands have shrunk to a historic low of %. ? The economic downturn has favored automakers like Toyota since consumers have bee more stingy and discriminating with their purchases, thus favoring quality and value, which are the major selling points for most Japanese automakers (versus, for example, luxury autos). ? The Japanese continue to grab bigger chunks of the market despite record spending on incentives by their domestic rivals. At the beginning of June, incentives for Chrysler, Ford and GM averaged $3,389 per vehicle, versus $1,062 for Japanese brands. Korean makes averaged $1,371 and European brands averaged $1,945. 0102030405060701996 2020D e tr o i t39。 adverse currency mov