Global auto executives are confident that the auto industry will see more profitable growth in the next five years and that the market share of electric vehicles will grow dramatically by 2030, according to a new survey by KPMG.
At the same time, supply chain issues and labour shortages are of great concern, said the survey.
KPMG’s 22nd Annual Global Automotive Executive Survey of 1,118 executives across automotive and adjacent industries found that 53 pc are confident that the industry will see more profitable growth, compared to just 38 pc who are concerned about profit prospects.
The survey, which included 372 CEOs, found that executives’ confidence extends to other areas as well, including the industry’s ability to withstand the next great disruption.
The news, however, is not all rosy. Executives are worried about a range of issues affecting the supply chain, including the price and availability of semiconductors, steel, rare earth elements and other scarce materials.
Over 50 per cent of respondents were “extremely” or “very worried” about the supply of these materials. Furthermore, 55 pc of executives are very or extremely concerned about labour shortages.
Executives expect the market share of EVs to grow dramatically, though there is no consensus about what market share it will capture. EVs’ popularity may depend partly on significant investments in DC fast-charging infrastructure; 77 pc of executives expect consumers to require charge times under 30 minutes when travelling. Most charging stations in service today take more than three hours.
The survey also found that expectations for the EV market are based on when EVs will reach cost parity with internal combustion engines. Most believe EVs can be widely adopted without Government subsidies (77 pc), but the majority still support such programmes (91 pc).
The technology and automotive industries are converging, leading to new alliances and new entrants. Start-ups are raising billions, and executives believe tech companies will enter the market.
Furthermore, 78 pc of executives agree that there will be a fundamental change in how vehicles are purchased in the coming years, saying that most will be sold online by 2030. And about three-quarters predict that more than 40 pc of vehicles will be sold directly by automakers to consumers, bypassing dealers.
With the move to digital commerce, executives expect that automakers will monetise the vast amount of data they will collect; 43 pc expect that automakers will sell data to auto insurance companies.
“It’s encouraging to see such widespread optimism about the growth prospects for the auto industry,” said Mr Gary Silberg, Global Head of Automotive at KPMG. “Car manufacturers have rarely faced such an array of technological and business-model changes since the dawn of the automotive industry 130 years ago. Flying taxis, cars by subscription, ubiquitous and fast EV charging stations, big-tech car entrants —these are some of the developments we can expect in the next 10 years,” he said.
Mr Vinodkumar Ramachandran, Partner, KPMG in India, said, “ To become the custodians of automotive data, automakers will need to ensure that consumers’ trust in data privacy won’t be abused. This is an opportunity to create a new relationship with customers based on trust, by being careful guardians of their data.”
