KPMG’s 23rd Annual Global Automotive Executive Survey

EN | TH

KPMG’s 23rd Annual Global Automotive Executive Survey finds that 83% of executives are confident that the automotive industry will see more profitable growth in the next five years, but expectations of worldwide electric vehicle (EV) sales in 2030 are becoming more realistic. At the same time, executives remain very concerned about supplies of commodities and components.

KPMG’s 23^rd Annual Global Automotive Executive Survey of 915 executives across automotive and adjacent industries found that 83% are confident the industry will see more profitable growth over the next five years, compared with 53% in the survey last year. The survey, which included 207 CEOs/Presidents/Chairmen, found that they had become more cautious about near-term results, given the potential headwinds facing the macroeconomy.

“Auto executives are extraordinarily optimistic about the future, but at the same time their confidence is tempered by the need to turn automotive dreams into reality. Car manufacturers have committed more than half a trillion dollars to developing a dazzling array of new vehicles built in advanced manufacturing facilities. To deliver on the promise, car companies will take many roads to their destination. Some will lead to great success; others could end in failure,” said Gary Silberg, Global Head of Automotive, KPMG.

Executives expect the market share of EVs to grow around 40% of total car sales by 2030. Last year, predictions were as high as 70%. Executives have greatly tempered their expectations about EV sales growth in India (infrastructure challenge), Brazil (biofuels as an alternative) and Japan (a focus on hybrid and energy sources other than batteries).

There is, though, more confidence that EVs will achieve cost parity with internal combustion engine (ICE) vehicles without government help. 82% percent believe that, in the next 10 years, EVs will be widely adopted, with no government subsidies.

With the proliferation of new models, entrants, and technologies, executives believe consumer buying decisions in the next five years will focus on driving performance and brand image. Data privacy and security are also key factors in purchase decisions.

Car customers are expected to shop increasingly online, opening opportunities for manufacturers to sell directly to consumers, as well as online through dealerships. Traditional e-commerce players will also compete for car purchasers.

Auto executives are very optimistic about the prospects for after-sale revenues. 62% are very confident that consumers will be willing to pay monthly subscription fees for software services such as EV charging, car-maintenance analytics, advanced driver assistance, and other over-the-air updates.

Executives think automakers continue to see the insurance market as a key growth opportunity, but they have shifted focus from competing against insurers to partnering with them or selling them data.

Executives remain very concerned about supplies of commodities and components, especially semiconductors, as well as items such as electrical steel and lightweight materials that are crucial to increase fuel efficiency and extend battery range.

In response to the vulnerability of supplies, car makers are focusing on near-shoring and on-shoring, to reduce their reliance on only one or two countries.

Many executives think Apple will enter the car market and become a leader in EVs by 2030, moving to fourth place in the survey from ninth in 2021. Tesla is expected to remain the market leader in EVs. Whichever company becomes the leader, nine in 10 executives say start-ups will have a sizeable effect on the auto industry. More than one in five say they are extremely likely to sell non-strategic parts of their businesses, given the massive investments required to compete. Contract manufacturing will become even more strategic going forward.

For Thailand, the government aims to drive Thailand towards a low-carbon society and make Thailand a manufacturing center for electric vehicles and auto parts in the ASEAN region, in accordance with the 30@30 policy, which aims  for at least 30% of total automotive production to be ZEV (Zero Emission Vehicle) by 2030¹.

To download the full report, please visit the 23rd Annual Global Automotive Executive Survey.

KPMG conducted a survey of 915 executives across the automotive and adjacent industries in October 2022. Two hundred and seven CEOs/Presidents/Chairman responded to the survey, along with 209 other C-level executives, 293 heads of business units and departments, and 205 business unit managers. Fifteen percent work for car manufacturers and 15% for Tier-1 suppliers. Sixteen percent are employed by information and communication technology companies.

Three hundred and fifty-one work at companies with annual revenue of more than $1 billion.  The two countries with the largest number of responses are the U.S. (28%) and China (17%). Europe has 29 percent of respondents, with 26% located in India, Japan, South Korea, Australia, Thailand, Indonesia, Canada, Latin America, South Africa and Saudi Arabia.

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. 

KPMG in Thailand, with more than 2,000 professionals offering Audit and Assurance, Legal, Tax, and Advisory services, is a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

Ploi Phayakvichien
Manager, KPMG in Thailand
E: ploi@kpmg.co.th