Morgan Stanley Research Report Pdf

[Gano Richardson]

Theintersection of many technologies, such as ultra-efficient batteries, autonomous systems, and advanced manufacturing processes are spawning a flurry of activity in this space," says Adam Jonas, Head of Morgan Stanley's Global Auto and Shared Mobility research team.

Although the idea of flying cars may seem fantastical, much of the ecosystem is already in development in complementary technologies. Military drones have been around for years, and electrified, autonomous vertical takeoff and landing vehicles (VTOLs) are gaining traction. In logistics, drone package delivery is in active testing. Improvements in batteries, artificial intelligence and satellite communications are also expanding the possibilities.

NASA even entered the game in November, 2018, funding an industry contest aimed at accelerating urban air mobility development and instilling public confidence in the technology. The first challenge was for participants to demonstrate the safe operation of a piloted or remotely piloted aircraft capable of carrying at least one adult passenger within a simulated, challenging urban environment."

The potential for flying vehicles comes from their ability to solve vexing problems for companies and consumers. Shipping goods would likely be the first use case because of the lower degree of technological barriers (weight, size, etc.) as well as fewer regulatory hurdles. Benefits would include improved package delivery service to rural areas, decreased shipping costs and reduced congestion in urban areas.

Toward that end, the CEO of a major airplane manufacturer announced in September, 2018, that the company is investing in urban mobility and flying taxis." Additionally, an aviation company has begun investing in a helicopter ride-hailing service.

It's still early days for urban air mobility, but Morgan Stanley Research believes that autonomous aircraft could be common by 2040. Battery technology, processing and computing power, and advanced composite systems all overlap with eVTOL aircraft manufacturing.

However, the Morgan Stanley team doesn't believe technology will be an ultimate limiting factor. Instead the regulatory and societal concerns surrounding the technology will need to catch up to the tech itself, Jonas says. As expected, addressing safety will be at the top of regulators' lists.

Flying cars could initially gain market share from cars on the road, planes and public transportation. However, it could also open up a whole new world of business across multiple sectors. In its base case, these opportunities point to a total addressable market of $1.5 trillion by 2040. A more bullish forecast places the market at $2.9 trillion.

For example, with an ability to make four times as many trips as a regular car, flying cars could revolutionize the ride-sharing industry. The autonomous aircraft ecosystem would also include makers of sensors, batteries, aircraft parts, and the software systems to operate the vehicles, monitor aircraft traffic, provide network security and more.

For Morgan Stanley Research on urban air mobility, ask your Morgan Stanley representative or Financial Advisor for the full report, Flying Cars: Investment Implications of Autonomous Urban Air Mobility" (Dec. 2, 2018). Plus, more Ideas.

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The move to sourcing from Asia, combined with the rise of value retailers, has seen clothing prices fall significantly over the last two decades. Despite falling prices, clothing markets continued to grow in value terms, because consumers responded to lower prices by acquiring clothing in ever-larger quantities.

A combination of reduced shipping costs and regulatory changes, for example China entering the World Trade Organisation in 2001, made it possible for developed-market retailers to shift their sourcing locally to countries with much lower labour costs, mostly in East Asia.

Since labour is the largest component in the cost of most apparel garments, this lowered the cost price of most garments significantly. Compounded by channel mix changes, such as the growth in discount channels, this has resulted in steady reductions in average selling prices in apparel in most developed markets.

Morgan Stanley Research predicts clothing is likely to continue to become cheaper to produce. In the near term, production may continue to shift from relatively expensive countries like China to countries such as Vietnam and Bangladesh, while in the long term, technology - particularly the rise of 'sewbots' - could significantly reduce the amount of labour required to make clothing. This could potentially increase speed to market and reduce transportation costs.

So why is per-capita consumption of apparel stabilising (or in the case of the UK and Japan, even falling slightly), when it had been increasing steadily for so long? Morgan Stanley Research believes there are two main reasons why clothing volumes are no longer growing:

Even in the most developed countries, apparel retailing remains a fragmented industry with few retailers enjoying double-digit percentage market shares. So it is possible that some retailers will prosper, however, Morgan Stanley Research predicts the majority of the big retailers, are likely to struggle.

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Trade tensions, political uncertainty and softening global growth are contributing to a volatile market. While the future is uncertain, diversification helps to manage risk and reduce the impact in the event of a significant market dislocation.

A report published Wednesday by Morgan Stanley Research highlights demand expectations and how carriers and brokers are hungry for freight. The 37-page report is a combination of survey data and pricing models, with expectations and sentiment for the next three months indicating a negative outlook.

Sentiment remains bearish with shippers, but brokers and carriers remain neutral. The report said compared to the last check, brokers continue to push rates lower but mode matters. LTL pricing remains disciplined, but a large topic to watch will be how carriers balance lower rates coupled with higher costs on labor and equipment.

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