15 January 2018 – Global auto executives agree: consolidation of the auto industry is likely to gain speed if the auto industry is to successfully compete against major technology companies racing to dominate the car ecosystem. Original Equipment Manufacturers (OEMs) will need to find the right balance of competition and integration in order to compete with digital players rapidly entering the auto industry.

Other key insights identified in the 19th annual KPMG Global Automotive Executive Survey, a survey of 900 executives in the automobile and technology industry and approximately 2,100 consumers from around the world, include:

• 74 percent of executives believe the share of vehicles manufactured in Western Europe will be less than five percent by 2030, with production moving in large part to Asia;
• The majority of executives believe almost 50 percent of brick-and-mortar retailers will close by 2025;
• Consumers will prioritize data security in purchase decisions and will expect security to become part of the vehicle standard operating equipment;
• Fuel cell electric vehicles (FCEVs) replace battery electric vehicles (BEVs) as the year’s number one manufacturing trend

Dieter Becker, Global Head of Automotive at KPMG: “The financial strength of the biggest technology companies overshadows the major auto manufacturers. Together, the 50 major auto manufacturers make up only 20 percent of the market capitalization of the 15 biggest technology companies. In 2010 they made up 40 percent. This clearly shows digital companies are playing in a completely different financial league. Particularly for mass producers, partnership is key if they want to survive against the technology giants. Although premium suppliers are better positioned, they too have recognized the signs, resulting in integrations such as map services or charging stations for electric cars.”

Over half of the executives (56 percent) are more or less certain that the number of car dealerships will drop by 30 to 50 percent by 2025. Dieter Becker: “Almost 80 percent of executives are convinced that the only means for dealers to survive is by restructuring into a service factory or a used car hub.”

More than 80 percent of executives are convinced that the use of car and driver data will be the main component of the automobile industry’s future business model. This means that the term ‘standard equipment’ must be redefined: in the opinion of 85 percent of the executives and 75 percent of customers, data and cyber security will be a prerequisite for purchasing a car in the future.

Global auto production will surpass the 100 million mark even before the end of the century.  While today 3,000 different models are being produced in more than 700 factories, only two percent of these are pure electric vehicles. Dieter Becker: “Even if we keep hearing about the e-mobility breakthrough: Electric cars will not be the only vehicles on the road in the future. In the foreseeable future a variety of different powertrains will continue to co-exist. More than three-quarters of global executives say fuel-cell electric mobility will be the real break-through for electric mobility.”  

To read more insights from the 2018 KPMG Global Automotive Executive Survey and to use the interactive tool to filter by country, respondents, and topics, please visit kpmg.com/GAES2018.

In this year’s survey we asked a total of 3,000 respondents our questions, of whom 900 are automotive executives – more than half are C-level executives or CEOs, Presidents or Chairpeople. Around one third of the respondents are based in Western and Eastern Europe, while 15 percent come from China and also 13 percent each from North and South America. 16 percent of the executives are located in India & ASEAN and 12 percent in Mature Asia. 

The respondents represent companies of all parts of the automotive value chain including vehicle manufacturers, Tier 1, 2 and 3 suppliers, dealers, financial services providers, mobility service providers and for the first time also ICT companies. More than 70% of all participants act in companies with annual revenues greater than US$1 billion, of whom almost 70 percent even have revenues of more than US$ 10 billion. The survey was conducted online and took place between July and November 2017. Also, 2,100 customers from around the world, all ages and educational backgrounds were interviewed to give us insights and their valuable perspectives and opinions.

All the survey data is now available at www.kpmg.com/GAES2018 in an interactive online tool where users can compare statistics by country, region, question asked and more. 

A copy of KPMG’s Global Automotive Executive Survey 2018 can be also found at www.kpmg.com/GAES2018. 

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 197,263 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

KPMG in Myanmar provides Tax and Advisory services in Yangon. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

Ploi Phayakvichien
Tel: 02 677 2034 
ploi@kpmg.co.th

Praewpan Luangphaipol
Tel: 02 677 2141
praewpan@kpmg.co.th