Other key insights identified in the annual KPMG GAES, a survey of almost 1,000 executives in the automobile and technology industry and approximately 2,000 consumers from around the world, include:

• Auto industry is likely to be driven by policies and regulations;
• Countries are likely to match powertrain technology to their raw materials: expect the US to focus on internal combustion engines (ICEs) and fuel cell electric vehicles (FCEVs), while China probably will rule the e-mobility market;
• Retail landscape is undergoing dramatic transformation – number of retail outlets will be reduced or transformed by 30-50% by 2025;
• No one player will master the value chain alone – more companies may be willing to cooperate in the future;
• Majority of consumers want to buy a hybrid as their next vehicle;
• Battery electric vehicles (BEVs) reclaim spot over fuel cell electric vehicles (FCEVs) as the year’s number one manufacturing trend;
• Toyota is named by executives as the brand positioned for best future success, followed by BMW and Tesla.

As Raluca Soare, Partner, Head of Automotive, KPMG in Romania, explains: “The automotive industry is in a turbulent period, with disappointing shareholder returns and poor return on capital. All of this in the midst of huge transformational pressures brought on by the megatrends of electric powertrains, connected and autonomous vehicles and Mobility-as-a-Service – and exacerbated by uncertainties like Brexit and potential trade wars. With so much funding required for vital strategic initiatives, it’s time for the automotive industry to reconsider its strategies.”

Dieter Becker, Global Head of Automotive at KPMG: “The auto industry will need to get comfortable with being uncomfortable during this time of change. There is simply not one global answer and the industry is currently functioning as a set of connected but distinct islands. These entities will change, merge and transform as the industry embraces the technology revolution. KPMG particularly sees this uncertainty in the area of software driven business. The majority of OEMs surveyed believe they are capable of managing a superior platform service to offer mobility services. KPMG holds a different opinion, as we believe it will be extremely challenging for traditional asset-based players to occupy and compete with tech giants for the software-driven mobility opportunities.”

Regulators acting as the driving force

More than three out of four (77%) of executives are convinced that while OEMs declared themselves responsible for the technological agenda in the past decades, that role is being taken over by the regulator who will set the primary agenda defined by industry policies. Dieter Becker: “Industry policies in Asia and the US seem to be far more advanced than in Europe: 83% of Chinese executives and 81% of executives in the US believe their country has clear automotive industry policies. In Western Europe only half of CEO respondents felt the same.”

Multiple drivetrain technologies will co-exist

Execs globally believe in a fairly even split of BEVs (30%), hybrids (25%), FCEVs (23%) and ICEs (23%) by 2040 – with BEVs taking the lead. And consumers say “no” to fully alternative drivetrain technologies, with hybrids the number one choice for a consumer’s next car choice and ICEs closely following.

Mobility and logistics will merge

The expectations for a mobility and logistics ecosystem are increasing: more than ever before, executives agree (60%) that in future we will no longer differentiate between the transportation of human and goods. Dieter Becker: “One thing is clear: no player will be able to manage it alone. There is awareness among executives, with 83% agreeing that with the emergence of what we are calling “mobilistics”, companies will need to both re-think their business model and also recognize the need for cooperation to create a mobility ecosystem. The company offering the best customer experience to people and goods will likely own the platform.”

“In this new world, consolidating with industry peers may be the only way for the auto business to survive and keep up with non-asset based ecosystem players. Finding the right balance between where to compete, cooperate and co-integrate is the key to success. Tomorrow’s automotive winners are likely to be those companies that can adapt business models swiftly and reallocate resources to areas of greatest strategic need,” says Alin Negrescu, Partner, KPMG in Romania.

To read more insights from the 2019 KPMG Global Automotive Executive Survey and to use the interactive tool to filter by country, respondents, and topics, please visit home.kpmg/gaes2019.

About KPMG Global Automotive Executive Survey 2019

In this year’s survey we asked a total of 3,000 respondents questions, of whom 1,000 are automotive executives – more than half are C-level executives or CEOs, Presidents or Chairpeople. More than one third of the respondents are based in Western and Eastern Europe, while 14% are from North America. About 10% each originate from South America, India and ASEAN, China and the region of Japan and South Korea. The rest of the world is represented by the remaining 6%.

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, energy and infrastructure providers, government authorities and ICT companies. More than 60% of all executives act in companies with annual revenues greater than US$1 billion, and 26% have revenues higher than US $10 billion. The survey was conducted online and took place between October and November 2018.

Also, 2,000 customers from around the world, of 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 home.kpmg/gaes2019. in an interactive online tool where users can compare statistics by country, region, question asked and more.