A SCENARIO ANALYSIS OF PLATINUM GROUP METALS WITHIN THE TRUCKING INDUSTRY

Abstract

Platinum Group Metals (PGM) are important components within the automotive industry, used for cleaning vehicles toxic gas emissions. An increasing demand of these metals have been observed, and simultaneously, mining organisations have been experiencing declining ore grades in the mines, causing the demand to exceed the supply. This creates an imbalanced market, which strongly impacts the price levels of the metals. The increasing and volatile prices, combined with the posing threat of supply scarcity, makes it essential for Original Equipment Manufacturers (OEMs) in the trucking industry to secure their supply in a sustainable way. This study aims to investigate the future evolution of the Platinum Group Metals within the trucking industry in a five-year time horizon, and to provide insights which serves to guide OEM’s in their responses to manage the future uncertainties. This through using the scenario analysis methodology, which is a forecasting method suitable for areas characterised by high uncertainty. Through the identification and analysis of trends that will drive the future evolution of PGM, and the uncertainties that will shape this evolution, four plausible future scenarios are derived. The study is based on an empirical investigation including both interviews and literature covering this topic. The analysis establishes a continued imbalance between the supply and demand resulting in increasing PGM price levels and a volatility. Moreover, the analysis finds that the most critical uncertainties that will shape the evolution of the PGM within the trucking industry are (1) the relevance of PGM as a result of new technological development and (2) the sustainability focus. By combining the potential outcomes of these two critical uncertainties, four future scenarios are built which are labelled; Sustainability is King, Doing good by Doing Well, In it for the Ride and Money Talks. This study shows that the specific OEM can meet the challenges of each scenario through adapting their level of involvement in the supply chain. This study contributes to an understanding of how the evolution of PGM within the trucking industry will look like in the coming five years, and how the level of involvement in the supply chain can be used to generate a competitive advantage.