KPMG’s Global Automotive Executive Survey 2014: Strategies for a fast-evolving market

As alternative powertrain technologies continue to shape the global automotive sector, plug-ins are tipped to be the leading form of e-vehicle. And organic growth has overtaken joint ventures and partnerships in popularity, as businesses reconsider the benefits of alliances.

Faced with relatively long development cycles, automakers are investing in downsizing the internal combustion engine in parallel with alternative electro-propulsion. Respondents to KPMG International’s 2014 Global Automotive Executive survey  also believe that innovation is critical to survival, to achieve technological leadership and adopt forward-looking mobility solutions.

Automotive executives have to cope with a range of complex trends:
OEM strategy shifts to organic growth

• In 2013, respondents placed joint ventures and partnerships as the main business strategy, while organic growth now tops the list. This view is felt most strongly amongst OEMs from the TRIAD countries, with 95 percent listing organic growth as their main business strategy

Plug-in vehicles in demand

• Plug-in vehicles are expected to attract the greatest demand of any e-vehicle, while 69 percent of respondents also consider fuel cell technology as one of the key automotive trends. Seventy-six percent say that ICE downsizing and optimization is a key issue, compared to just 59 percent for battery-powered technologies.

Technology is driving change

• There is a strong correlation between technological leadership and the ability to remain independent. The trend to autonomous driving means that self-driving cars are becoming a real possibility.

Growth in urban populations changes mobility patterns

• Almost half of respondents feel that mobility solutions can deliver a profit within the next 5 years. The growing trend of autonomous driving [the self-driving car] may have a positive impact on the development of mobility solutions.

Consumers still want fuel-efficient cars with built-in connectivity

• Ninety-two percent of global executives say the top priority for today’s car buyers is a longer-lasting vehicle with low gasoline consumption; the latest in-car technologies are also important.
• Less than half of respondents feel alternative fuel technologies are critical to buyers.

Online sales to grow, but dealerships divided on future models

• Fifty-three percent believe that traditional dealership models are not appropriate, with online retailing and multi-brand providers set to rise significantly.
• Seventy-one percent feel that online dealerships are the way forward, although only 60 percent of dealers share this opinion.

Vehicle sales in emerging markets to accelerate

• Eighty-five percent say that growth in the BRICs and other high-growth markets is the biggest single industry trend up to 2025.
• The greatest growth potential for BRIC OEMs lies in South East Asia, with Western Europe and North America largely off-limits.
• Seven out of the 10 top OEMs expected to grow in the next 5 years will come from BRIC countries.

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