Automotive industry executives have identified manufacturing fuel efficient cars as the top industry trend and are focused on investing in new models / products and technologies to satisfy consumer demand, according to an annual global KPMG survey.
The survey, based on interviews with 200 senior executives at vehicle manufacturers and suppliers worldwide, reveals that manufacturing fuel efficient cars (29 percent) and switching to alternative fuel vehicles (23 percent) are the leading trends.
When asked to rate the importance of automotive product innovations over the next 5 years the executives surveyed stated hybrid systems, fuel cell technology, advanced materials and electric and battery technologies as priorities. The findings show a shift in focus from last year’s results, with this year showing much stronger views on hybrid systems, up 91 percent from 79 percent. In addition, electric and battery technologies went up 82 percent from 60 percent.
“The good news for Australia’s automotive industry is that these findings are supported by the Federal Government’s New Plan for a Green Future, including an expanded Green Car Innovation fund of $1.3 billion and a new targeted green assistance program via the Automotive Transformation Scheme. Innovation will be a key driver of Australia’s automotive industry and it is encouraging to see manufacturers recognising the need for R&D and investing in new technologies to make cars in the most environmentally responsible manner possible,” said David Gelb, KPMG’s Automotive Partner.
In relation to consumer preferences, 96 percent of respondents said fuel efficiency will be the primary factor driving consumer purchase decisions with affordability (83 percent) and alternative fuel (70 percent) also rating high.
Auto executives, for the second successive year, state that manufacturers are intent on keeping high levels of investment in new products and technologies. In fact, 91 percent, versus 94 percent a year ago, said that investment will increase in new models and / or products in the next 2 years, and 92 percent of those surveyed said they expect Original Equipment Manufacturers (OEMs) to increase investment in new technologies, slightly down from last year’s 93 percent.
“In view of possible higher oil prices, a slowing economy and the growing awareness of climate change, the industry must meet consumer preferences for more fuel and energy efficient vehicles. The executives surveyed clearly understand the need for investment in innovation. The industry needs to be focused on the end game and not be deterred from it, as it presents a solution to keeping ahead of the competition,” said Gelb.
On the topic of areas in which manufacturers and suppliers should look to for costs savings over the next 5 years, the top three were manufacturing process and technology innovations (up 3 percentage points to 70 percent this year), product materials innovation (up 10 percentage points to 67 percent this year), and low-cost country sourcing (falling 6 percentage points this year to 59 percent). When asked specifically about the top cost-savings opportunity by sector, the executives said OEMs (68 percent), Tier One (69 percent) and Tier Two suppliers (77 percent) would benefit the most through manufacturing process and technology improvements.
The executives interviewed for the survey represented vehicle manufacturers and suppliers in Australia, Canada, United States, United Kingdom, France, Germany, Sweden, India, China, South Korea, Japan, Thailand, Brazil, Mexico, Spain, Poland, Slovakia, Russia, Czech Republic, Italy, Switzerland and South Africa. KPMG has released an annual survey of automotive executives expressing their views on the state of the industry since 1999.
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