Power Systems Research

2022-01-22

MHV Production Growth Expected in 2022-2023

Summary: Global demand for Medium and Heavy Commercial Vehicles (MHV) rebounded in 2021 but overall growth in the segment was flat. Going forward, we expect the growth to accelerate in 2022 and 2023. The exceptions to this rebound trend are in China and India, which continue to decline and sharply drive overall global production numbers into negative territory.

We expect global production volumes in 2022 to gain 3.7% vs 2021, with a positive trend in all regions, except for China, where we expect production volumes to be down -3.6% in 2022 vs 2021. China experienced a surge in demand during 2020 due to the change in emissions regulations, so 2021 was down significantly, about 20%.

North America: While supply chain disruptions continue to negatively impact the commercial vehicle market, medium and heavy commercial vehicle production is expected to finish 2021 15.8% higher than 2020. The forecasted production growth rate is expected to continue to show improvement through 2023 as supply chain disruptions ease and truck capacity in the market begins to align with demand. The disruption in the supply chain and on-going issues with Covid will continue to impact the market this year.

GLOBAL REPORT

SUMMARY. The global economy performed very well in 2021 and continues to recover, along with trade, employment and incomes. But the revival is unbalanced, with regions/countries, businesses and people facing very different economic realities. Recent improvements also conceal structural changes, which means that some sectors, jobs, and technologies will not return to their pre-pandemic trends. Based on the most recent economic developments and trends, Power Systems Research remains somewhat optimistic about the global recovery.

Many of us hoped to be in the post-Covid phase by now, but it is evident that there is no quick way out. The pandemic has had a profound impact on the world economy, and it will continue to challenge established norms of life and business into the foreseeable future. As we start the new year, many challenges remain, new and old alike: re-surgency of COVID variants, restrictions on travel, supply chain challenges, shortages of materials/goods, inflation, and employment, as well as renewed geopolitical tensions across many parts of the globe.

Power Systems Research witnessed a strong economic recovery globally in 2021, despite regional differences. Output in most OECD countries has now either surpassed or is about to reach pre-pandemic levels, but lower-income economies, particularly those where vaccination rates are low, are at risk of being left behind. Furthermore, the rebound will continue to vary widely among different market segments.

Global inflation re-surfaced in 2021 and presents a real risk to economic recovery in all regions. The renewed inflationary pressure risks lasting longer than was expected a few months ago. The surge in retail and wholesale energy costs in late 2021 will undermine economic growth prospects for large parts of Europe and Northeast Asia well into 2022. Rising food and energy prices already have impact on low-income households in particular.

2021-12-19

Indonesia Aims at Lead in Integrated EV Production

Akihiro Komuro

INDONESIA REPORT

Investment related to EVs is gaining momentum in Indonesia. While the government is aiming to upgrade the industry by mainly using nickel as a battery material, Hyundai Motor of South Korea and Hon Hai Precision Industry of Taiwan have announced their plans to produce EVs and automotive batteries. If the concentration of industries advances, the country will compete with Thailand, which is also making efforts to attract related industries, for the leading role in EV production in Southeast Asia.

At the Indonesia International Auto Show, which started in the suburbs of Jakarta on Dec 11, Hyundai Motor’s compact EV “Kona” attracted much attention. The company will begin production in 2022 at its plant in West Java province, which will soon be operational.

Toyota Joins BYD To Build Affordable $30,000 Electric Car

Akihiro Komuro

JAPAN REPORT

Toyota reportedly has partnered with China’s BYD to develop an affordable electric car to launch next year. The Japanese automaker has widely been recognized as a laggard in the transition to electric vehicles. Years of betting on hydrogen fuel cells and hybrid vehicles has put Toyota behind on battery-electric vehicles.

Reuters reports Toyota is planning to release a “small and affordable electric sedan” in China next year:

The electric vehicle is reportedly going to be powered by BYD’s blade battery cells with LFP chemistry. LFP chemistry has improved enough in recent years that it is moving from mainly being used in electric buses to now electric cars. BYD’s blade battery has attracted a lot of attention – even from Tesla, according to reports coming out of China. A Toyota source talking to Reuters said that it is what is enabling the automaker to produce its first affordable all-electric car:

New Cars in Russia Cost More Than in USA and Europe

Maxim Sakov

The prices for cars in Russia now exceed the prices abroad. The high prices are caused by high custom taxes, certification for Glonass satellite systems and exchange rates of national currency. After many global OEMs built assembly plants in Russia, prices for cars were equal to cars in other markets, and after fall of the Ruble exchange rate in 2014, cars became even cheaper. However, in 2021 prices have grown significantly because of a shortage of semiconductors.

For example, the minimum price of a Hyundai Sonata in the USA is US$ 24,150, equivalent to about 1,725,000 rubles. In Russia, a similar car is priced at 1,799,000 rubles. A Kia Seltos in the USA costs US$ 22,490 (about 1,605,000 Rubles); in Russia, the minimum price is 1,734,000 rubles. Cars such as the Toyota Camry, Toyota Corolla and RAV4 are also more expensive in Russia by about US$ 3,000-5000.

Read The Article

PSR Analysis: Actual prices are even higher in Russia because of dealer mark-ups. Sometimes, to buy a car, it’s necessary to pay 1.5-2 times the prices as a cost for “options”. As a result, there has been a 20% fall of sales in the country. PSR

Maxim Sakov is Market Consultant – Russia Operations for Power Systems Research

GAZ Group May Start Mass Production of Hydrogen Engines in 2.5 Years

Maxim Sakov

This report comes from General Director of GAZ Power Aggregate division Konstantin Rukhani. “After 18 months we shall complete the tests, after about 2.5 years, we’ll come to mass conveyor production,” he told Ruhani. He added that the design of the new hydrogen engine will be similar to its gas reciprocating engine.

“We consider that at the moment, if we come to the strategy of use gas piston engine working on hydrogen, we can get vehicle with a price of 30-34% higher than current ones. The engine will be less demanding for the purity of hydrogen fuel,” he added.

TSMC in Early Talks on Germany Plant

Erik Martin

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks with the German government about potentially establishing a plant in the country, according to a senior executive.

Various factors, including government subsidies, customer demand and the talent pool, would influence its final decision, TSMC senior vice president of Europe and Asia sales Lora Ho (何麗梅) told reporters on the sidelines of a technology forum in Taipei.

The discussions come as the EU and others seek to increase domestic chip production to mitigate the risk of supply chain disruptions.

The chipmaker has not discussed incentives with Berlin or decided on a location, Ho said.

Cummins Announces Hydrogen and Electrified Portfolio in Brazil

Fabio Ferraresi

When completing 50 years in Brazil, Cummins announces the arrival of the New Power unit in South America. This includes Electric propulsion, NG Engines, cleaner Diesel Engines, Fuel Cell and mainly Hydrogen.

Source: M&T Magazine Read The Article

PSR Analysis: As part of its global strategy, Cummins in South America, leads in the first phase in market niches with NG Engines and follows with other new solutions in the following phases. PSR

Fabio Ferraresi is Director, Business Development South America, for Power Systems Research

VWCO To Invest US$ 400 million in Four Years in Brazil

Fabio Ferraresi

The amount is expected to be directed mainly to new technologies, such as for the Proconve P8 introduction in 2023, new technologies for Connectivity and development of sales and aftersales areas.

Source: O Estado de São Paulo Read The Article

PSR Analysis: The investment is higher than the former investments cycles but keeps the same line and makes the company one of the most important players in the Truck and Bus industry in South America. With this announcement, VWCO confirms its belief in the Brazilian Market and indicates its willingness to keep its market share lead. PSR

Fabio Ferraresi is Director, Business Development South America, for Power Systems Research

JCB To Expand Production Capacity in Brazil

Fabio Ferraresi

JCB plans to invest R$ 120 million (US$ 20 million) in its factory located in Sorocaba, State of São Paulo, with the objective of increasing annual production capacity from 4,000 to 10,000 units by 2026. JCB expects to grow 50% in sales volume this year, compared to last year’s results, and more than double the sales.

Source: Valor Economico Read The Article

PSR Analysis: With the increased production volume from new products made in Brazil, such as Wheel Loaders, JCB should be above 80% capacity. With the market growth forecast for Brazil, it will be necessary for JCB to increase production capacity. The scenario is slightly different for other players who have higher capacity in their plants in Brazil. PSR

Fabio Ferraresi is Director, Business Development South America, for Power Systems Research

News: Power Systems Research

MHV Production Growth Expected in 2022-2023