Widespread use of electric cars and, to a lesser extent, self-driving and even flying cars. Such are some of the revolutionary changes that await the automotive industry in the next five to ten years. This is according to a survey by the advisory firm KPMG, in which it interviewed over 1,100 car industry managers in 31 countries, including the Czech Republic. Respondents were most concerned about problems in supply chains exacerbated by the war on Ukraine.
The respondents generally predict that EVs will account for around half of new car sales in the US, Western Europe, Japan, and China by 2030. In Brazil and India, it could be 40 percent.
The proliferation of EVs will be helped by them becoming cheaper. Almost three-quarters of respondents believe that by 2030, the cost of EVs will fall to the level of combustion engine cars. However, a massive uptake of EVs depends on a significant acceleration of their charging speed, as this takes over three hours at most current charging stations. But drivers would need to recharge in 30 minutes at most while on the road, 77 percent of the executives said. The same proportion believe the use of EVs can expand without government subsidies.
Self-driving cars will be commercially available in major cities in Western Europe, the US, Japan, and China by the end of the decade. Most of those interviewed think so. Flying cars will be available in most major cities by 2035, 58 percent of respondents expect.
"Perhaps every aspect of the automotive industry, from development to production to sales, will undergo profound changes. Different abilities to adapt to trends will divide the sector into new winners and losers. It is vital for the Czech Republic to remain in the first group," warns Jan Linhart, automotive expert at KPMG's Czech office.
The main stumbling block? Supply chains and the labour market
Managers are most concerned about the persistence of problems in supply chains. More than half of respondents were very to extremely concerned about the unavailability and/or cost of steel, aluminium, copper, and lithium for batteries. Fifty-five percent of respondents were concerned about worker shortages, which particularly plague the US. Fifty-seven percent of respondents feared that the complexity and cost of trade rules and tariffs would increase over the next five years.
"After the Russian attack on Ukraine, the supply chains problems have become even more urgent. Business relationships involving Russian or Ukrainian companies are breaking down. Production in the Czech Republic is already being cut back because of this. In addition, the prices of raw materials are rising dramatically, and not only those imported from Russia and Ukraine. Moreover, Russia has ceased to be a market and car companies are stopping distribution and production there. All this has created additional huge uncertainties across the sector," Linhart explains.
Fifty-three percent of respondents believe that profits in the auto industry will grow over the next five years. Thirty-eight percent of respondents express concern about their future profitability. Nine percent have no clear opinion. "Optimism about profits varies by country. It was shared by 66 percent of respondents in the US, but only 49 percent in Germany. This is not a good signal for Czech car companies tied to Germany. Moreover, with the war in Ukraine, the profitability of the auto industry is even more uncertain," Linhart stresses.
The operation of the cars of the future is likely to generate large amounts of data and interest in its use. Forty-three percent of respondents expect automakers to start selling this data to insurers.
"The survey also found that by 2030, most new cars will be sold online. Three-quarters of those surveyed expect more than 40 percent of cars to be sold directly by carmakers to end customers. Some existing dealerships are thus in danger of gradually becoming an unnecessary intermediate link," Linhart concludes.