Due to global macro trends, from growing transportation needs to more stringent environmental standards, the conditions for our operations are changing. It is more important than ever to have a well-founded understanding of the market changes that affect us. By making use of these driving forces, we can build long-lasting, sustainable operations.
Size and growth
The market for brake and air suspension products is global, and total demand is dictated by global transport flows, which in turn are affected by global growth. Haldex operates and monitors business in four regions: Europe, North America, South America and Asia. The market trend for each region depends on economic development in the region, and the four regions differ significantly in terms of vehicle fleet design and technology content. Europe has the most advanced vehicle fleet, with a high technology content per vehicle. Generally, Asia is at a lower maturity level. However, Asia is progressing fast and is, in some cases, world-leading.
Haldex sells its products to manufacturers of trucks and trailers (OEMs) and to distributors. Distributors are divided into vehicle manufacturers’ own distributors (OESs) and independent distributors. The distributors, in turn, sell the products on to workshops and logistics companies. The OES distributors usually have customers who are early owners of the vehicle, while the independent distributors often work with later owners.
An important success factor for suppliers to the automotive industry is that the OE companies select their products for future vehicle models. By installing the products in new production, conditions are created for achieving large volumes over a long period in the more profitable aftermarket.
End users have different needs and make different demands on distributors’ ranges. Haldex endeavours to influence demand at all stages in order to persuade end-customers, i.e. logistics companies and workshops, to demand Haldex products from the distributors. In North America, for example, logistics companies can specify different components to the manufacturer of a truck or trailer, making them an important indirect customer.
Trends and drivers
We are seeing an accelerating development towards more advanced technology in vehicles to meet future challenges arising from increased population, urbanisation and climate threats.
Transport needs are increasing with urbanisation and improved infrastructure
More and more goods are being transported in a world with a growing population. The United Nations Population Fund anticipates an increase in world population from 7 billion people today to 8 billion in 2025 and 9 billion by 2050. Another important factor is increased prosperity. Between now and 2030, the world’s middle class is expected to double, while absolute poverty is expected to decrease.
More than 50 percent of the world’s population are already living in cities today, and according to the UN, the proportion is projected to increase to 66 percent by 2050. Increased urbanisation combined with a larger population and greater prosperity require better road networks and more technically advanced vehicles to meet the social and environmental challenges.
In countries with poor road network quality, trucks without a trailer are most common. Increased quality of the road network leads to more trailers being produced, this being the customer category where Haldex holds its strongest market position. Demand for more technically advanced vehicles also benefits Haldex. With increased demands for sustainable and efficient vehicle solutions, Haldex solutions are becoming more attractive.
Increased safety and environmental requirements
Every year, 1.2 million people die on the roads and 50 million are injured according to the World Health Organization. 91 percent of these accidents happen in low or middle-income countries, although these countries have only about half of the world’s vehicles. It is clear, however, that safety requirements are increasing in all parts of the world.
In 2015, it became mandatory for all newly manufactured buses and trucks in India to have ABS installed. Similar legislation has existed for about a year in Brazil. In Europe, stricter requirements for braking distance for heavy vehicles led to a breakthrough for disc brakes. Burning fossil fuels, such as oil and diesel, is a major source of greenhouse gas emissions that cause climate change. A sustainable transport sector must improve fuel efficiency and find alternatives with lower carbon dioxide emissions. An important area that affects emissions in this regard is the weight of the vehicle. By optimising the products’ design and selection of materials, many kilograms are saved, which is important in increasing the range of electric vehicles.
The global automotive industry is on the cusp of a far-reaching transformation driven by digitalisation, electrification and autonomous vehicles. This development will bring major social and environmental benefits while also paving the way towards new potential markets for Haldex. Electrification is driving the trend towards completely new types of energy-efficient braking systems. Electrification also results in a higher technological content per braking system. The opportunities digitalisation brings are in turn driving the development of autonomous vehicles, load optimisation, increased resource efficiency and enhanced safety. Digitalisation is also expected to change the market structure and various roles in the industry. Digital logistics platforms will probably challenge current operators and take over a greater proportion of sales, booking and load optimisation while freight transport will be handled by different vehicles optimised for the task. Autonomous truck convoys for long-distance transport combined with rapid pods for the final kilometre. The environmental benefits will be significant when capacity utilisation of both the road network and vehicles is optimised.