The global automotive industry has been in a phase of fundamental change for several years: Sales channels are changing, digitalisation is leading to new products and processes, and climate-friendly powertrains are making inroads. In recent months, further challenges have been added: disrupted supply chains, high energy prices, galloping inflation and rising interest rates.
This is also reflected in our KPMG Global Automotive Executive Survey 2022, for which we surveyed more than 900 board members and managing directors of major companies in the industry worldwide. 76 per cent of respondents believe that the economic environment will adversely affect their business in 2023.
Existing and emerging supply bottlenecks continue to cause sleepless nights in the automotive industry. At the same time, the transformation to the mobility of the future requires enormous investments. Here, however, it is important to keep the topic of ESG in mind and to see it as an opportunity.
Goran Mazar
Partner, EMA & German Head of ESG and Automotive
KPMG AG Wirtschaftsprüfungsgesellschaft
Reshoring and carve-out as relevant strategies
More than half of industry experts express great concern about the supply of raw materials and components (especially semiconductors, electrical steel and lightweight materials) that are important for increasing fuel efficiency and battery range. 65 per cent believe that moving manufacturing back to developed countries from emerging markets (reshoring) is very or even extremely important to supply chain strategy.
55 per cent also think that their company is very or extremely likely to divest strategically unimportant business units in the coming years.
Electric vehicles catch up with cost disadvantages
In the longer term, there is confidence among industry representatives: 83 percent are optimistic that they will be able to grow profitably in the next five years. That is considerably more than in our survey a year ago (53 percent).
Production and sales of electric vehicles will grow steadily until the end of the decade. Among the executives, hopes are rising that cost parity between vehicles with combustion engines and those with electric motors will be achieved even without subsidies: 72 percent assume that electrically powered vehicles will no longer be more expensive than combustion engines in 2030.
New market participants gain influence
Every facet of the automotive industry - from product development to manufacturing and distribution - is undergoing profound changes. This is also leading to new entrants expanding market share. Nine out of ten industry representatives expect start-ups to have a strong impact on the automotive industry. In addition, many of the respondents believe that the technology group Apple will play a significant role in the electric vehicle sector by 2030.
In addition, digitalisation will fundamentally change the relationship between car manufacturers and their customers and suppliers. Eight out of ten experts assume that by 2030 most car purchases will be made online.
Growth market insurance and subscriptions with potential
According to the experts, the insurance market has great growth potential. 90 per cent of the respondents believe that manufacturers will be successful in this market, either through a partnership with an insurer or by selling driver or vehicle data to an insurance company.
Subscription models for software services or other after-sales offers are seen as a possible additional source of revenue: 62 percent are very confident that customers will be willing to pay monthly subscription fees for this.
The KPMG Global Automotive Executive Survey 2022 is the 23rd edition of our annual survey. In October 2022, a total of 915 top executives from the automotive industry and related sectors were surveyed. In the English-language study, you can read how the industry assesses the future of alternative drive systems, and which new technologies, market participants and customer needs the companies are preparing for.
