Car industry is cautiously optimistic

Global KPMG survey of more than 900 car managers

Global KPMG survey of more than 900 car managers

Berlin, 20th December 2022

  • Negative impact from economic environment expected in 2023
  • Profitability: 5-year outlook confident
  • Electric vehicles make up for cost disadvantages
  • Insurance offers and subscriptions with potential

Three out of four managers in the automotive industry assume that rising interest rates, inflation and energy prices will adversely affect their business in 2023. Nevertheless, the vast majority are optimistic that they will be able to grow profitably in the next five years (83 percent). This is the result of a global KPMG survey of more than 900 board members and managing directors of major automotive companies in 30 countries.

Industry experts express great concern about the supply of raw materials and components - especially semiconductors, electrical steel and lightweight materials - which are highly important for increasing fuel efficiency and battery range. More than half are "very" or even "extremely concerned" about this. Two out of three respondents believe that the relocation of production sites from emerging countries back to industrialised countries (reshoring) is "very" or even "extremely important" for the supply chain strategy (65 percent). More than half of the experts also believe that their company is "very" or "extremely likely" to divest strategically unimportant business units in the coming years (55 percent). This is significantly more than a year ago (45 percent).

Electric vehicles catch up with cost disadvantages

82 percent of the respondents believe that EVs will be widely available in the next 10 years even without subsidies. The confidence of industry experts that they will be able to achieve cost parity between combustion engines and electric vehicles even without subsidies is increasing: about three quarters of the managers assume that electrically powered vehicles will no longer be more expensive than combustion engines in 2030 (72 percent). The majority of respondents see Tesla as the market leader in the field of battery-powered vehicles at that time, closely followed by Audi and BMW. Apple, which was in 9th place a year ago, follows in 4th place.

There is disagreement on the question of who is ahead in terms of charging stations. 22 percent of respondents think that the utilities are best positioned here. Independent network operators, oil companies, and car manufacturers and dealers follow with 16 per cent each.

Data protection plays an important role when buying

Most managers (80 percent) assume that driving performance plays a "very important" or "extremely important" role in vehicle purchasing. In second place they already assume the topic of data protection/data security (74 percent agreement). Low emissions, brand image and a pleasant driving experience are in equal second place with around 70 percent each. Eight out of ten experts assume that by 2030 most car purchases will be made online.

Growth market insurance and subscription models

According to the experts, the insurance market has great growth potential. Thus, 90 per cent of the respondents believe that manufacturers will be successful in the insurance market; be it in the context of a partnership with an insurer (46 per cent agreement) or through the sale of driver or vehicle data to an insurance company (44 per cent). 

The possibility of generating additional revenue in the future through monthly subscription fees for software services or other offers also seems to be a realistic option for most industry professionals. About two out of three respondents are "very" or "extremely confident" that customers are willing to pay corresponding subscription fees.

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Thomas Blees

Deputy Head of Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft