Global warming : the risk of hail damage to automotive industry

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Information about Global warming : the risk of hail damage to automotive industry

Published on July 8, 2016

Author: DrHansBertBong

Source: slideshare.net

1. hail : the € 30 billion exposure of EU automotive logistics industry 'do nothing is not an option' content:content: global warming =>=>increased extreme weather situations the risk to automotive industry countermeasures & options conclusion / summary -1-

2. global warming global climate pattern is changingglobal climate pattern is changing *1*1 higher temperatures increasing temperature extremes increasing risk due to storms, floods and hailincreasing risk due to storms, floods and hail -2-

3. the risk to automotive industry 1of 2 In Europe new cars, vans & trucks with anIn Europe new cars, vans & trucks with an estimated value ofestimated value of € 30 billion€ 30 billion are exposedare exposed to hailto hail // see Appendixsee Appendix damage can occur in areas which have not been exposed to hail for decades *2 insurance coverageinsurance coverage for 'act of god / force majeure' events not always sufficientnot always sufficient -3-

4. the risk to automotive industry 2 of 2 hail damage is desastrous as typically:hail damage is desastrous as typically: thousands of vehicles are affected. repair resources are limited vehicles cannot always be repaired to an 'as-new' standard customers dissatisfied due to waiting time and pre-damage of their new cars customers expect compensation : in addition to repair costs -4-

5. hail : countermeasures can auto industry learn from agriculture ?can auto industry learn from agriculture ? farmers around the globe have similar problem as hail can destroy entire harvest of their agricultural products many protect their plants with hail-netshail-nets or hail-defense deviceshail-defense devices *3*3 ('hail-cannons'): -5-

6. countermeasures : options for the automotive industry 1 of 3 Option 1Option 1 auto industry occasionally stores products within multi-storey car parks or under roofs. => not widely deployed as very investment intensive and low return on investment -6-

7. countermeasures : options for the automotive industry 2 of 3 Option 2Option 2 similar to agriculture business some car compounds are protected by hail-nets. =>not widely deployed due to expensive installation, ongoing costs (nets need to be replaced when ageing) and not 100% safe : there have been instances where construction collapsed and cars got damaged. -7-

8. countermeasures : options for the automotive industry 3 of 3 Option 3Option 3 similar to agricultureagriculture business and open-airopen-air festivalsfestivals hail-defense devices (so-called 'hail cannons') can be installed *4 not widely deployed although very low investmentvery low investment and little ongoing costlittle ongoing cost to operate physical description and function see *5 -8-

9. conclusion / summary extreme weather events are likely to increaseextreme weather events are likely to increase =>=> those are heavy winds, floods and hailstormshailstorms In Europe a value of € 30 billion€ 30 billion is exposed to hail as auto industryauto industry generally stores unprotectedunprotected new vehicles in open-air yards If 'do nothing is not an option''do nothing is not an option' and investment intensive installations such as roofs, garages or hail nets are not affordable then =>=> hail defense deviceshail defense devices ('hail cannons')('hail cannons') could be a solution to managethe enormous risk of hail damage -9-

10. Appendix -a1-

11. the risk : estimation method and assumptions : Europe's main Ro-Ro ports handle 17 Million vehicle imports and exports per year *6 Assumption 1 : Turnover assumption based on business intelligence and *7 : average storage / turnaround time per vehicle 2 weeks => 17 Mills / ( 2/52) = approx 650,000 cars, vans and trucks stored in ports Assumption 2 : 30% of all vehicles stored are either covered (by roofs or hail-nets) or used cars => 455,000 new cars stored in ports Assumption 3 : The inland compounds and railheads add up to similar amount to port space. => new units unprotected stored in the open air in Europe : roughly 1 Million vehicles. Assumption 4 : value of vehicles stored : 30,000 € / unit Total European exposure 30,000,000,000 € ( thirty billion Euro) Memo: as the global new car industry is about 6 times of the European, the global risk could be as big as 180 billion Euro if above assumptions and data are extrapolated. Method and assumptions : intellectual property of Dr.Bong Business Consulting Can be quoted with reference to Dr. Bong Business Consulting July 2016 -a2-

12. Data Sources and References ● *1 National Geographic : http://de.slideshare.net/kevin0o0/global-warming-77689 ● *2 in early 2000s about 1000 cars have been damaged in the Spanish port of Santander – Reportedly Sandander has not seen any hail in the decades before (the Author) ● *3 California Polytech State University: http://digitalcommons.calpoly.edu/agedsp/16/ and http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1036&context=agedsp ● *4 http://www.inopower.be/ ● *5 http://www.inopower.be/home/antihagelkanon ● *6 http://automotivelogistics.media/finished-vehicle-logistics/european-vehicle-ports-sail-into-the-light#port%20table ● *7 http://www.bremenports.de/standort/die-haefen/bremerhaven -a3-

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