The Hyundai Group and Volkswagen have been identified as two well-positioned brands for future sustainable automotive growth.
The sixteenth edition of KPMG’s Global Automotive Executive Survey, Who is Fit and Ready to Harvest has been released for 2015.
The report features the views of 200 senior industry executives and highlights how they are adapting to innovation challenges, the ‘connected consumer’ and more. The report also asks questions such as what is driving consumer demand, are companies betting on the right technologies and who is best positioned for sustainable growth?
The report’s findings are always interesting and this year has been no exception.
In the all-important race for market share, executives are most optimistic about Hyundai and Kia – with both South Korean brands tipped to increase their market share over the next five years. Volkswagen also rates highly and the general consensus is that VW will have more success than close rivals GM and Toyota in the short-term at least.
Emerging vehicle makers Chery (China) and Tata (India) were also viewed with optimism, with most executives predicting the car makers to grow positively over the next few years.
In other areas of observation, the latest KPMG report found that executives expect no major business model changes to disrupt the current status quo over the next five years. Many believe that the key to OEM prosperity over the coming years will be to achieve and maintain global reach. For established global players like BMW and Toyota, remaining independent is a top priority. Meanwhile, OEMs with limited global reach are expected to merge with others in order to survive.
On the topic of disruptive newcomers like Tesla, executives generally feel that there’s still a big gap to close before upstarts like Tesla can achieve the awareness and reach of traditional OEM brands.
Mobility Culture and Technology
In the mobility and technology stakes, KPMG suggests that ‘auto execs are caught between regulations that create technological challenges, and satisfying the target group of tech-savvy mobility consumers, that are never ofﬂine.’
The survey found that executives perceive vehicle ownership as remaining important for all age groups up to 2020, with respondents naming the 25-50 age group as the most reliant on personal transport.
In terms of vehicle size, demand for small cars is expected to have a high growth potential in both established and emerging markets, whilst a focus on downsizing is still the number one powertrain investment area over the next ﬁve years.
Though downsizing (based on fossil-fuel technology) still out-rates alternative fuel technology, executives see plenty of potential in fuel cell and battery electric technology.
Though plug-in hybrids are set to attract the highest demand of all electriﬁed propulsion technologies, confidence in the future of electric technology is showing signs of weakening compared to fuel cells.
According to Global Head of Automotive KPMG International, Dieter Becker, ‘the automotive sector will need to achieve a ﬁne balance between its traditional product-and technology-driven past and its potentially ubiquitously connected consumer lifecycle-centric and service-driven future.’
He goes on to observe that the industry seems to be ‘positioned halfway between these two imperatives.’
‘Tomorrow’s consumers will not only expect, but demand new and innovative services and mobile apps that plug seamlessly into ubiquitously connected solutions. To stay ahead, traditional automotive players may need to reinvent their business models and ask themselves two pressing questions: “how do I become a high value service brand, while making the most of my strong product and engineering heritage?” and secondly, “how do I think about my brand from a consumer perspective, to attract the new generation of “digital natives”?’
To view the full 2015 Global Automotive Executive Survey findings, head to kpmg.com