KPMG has released the results of its 2019 KPMG Global Automotive Executive Survey, including insights specific to Luxembourg. The survey explores the state and future of the automotive industry by interpreting statistics from STATEC and gathering responses from 900 managers and 2,100 consumers worldwide. This is the 20th edition of the survey, which is done every year.
A new wave of technology is hitting the auto industry, obliging companies to prepare and adapt in anticipation—or reaction. As the sector becomes increasingly digitalized, changes, mergers, and transformations are expected to occur more and more.
KPMG’s survey sought to understand the industry’s stance on and understanding of these forthcoming changes, with a few notable results. For example, most of the original equipment manufacturers (OEMs) surveyed believe themselves capable of managing a platform and offering mobility services. However, based on market experience, KPMG believes it will be extremely challenging for these traditional asset-based players to compete with tech giants for software-driven mobility opportunities.
Ugo Platania, Partner at KPMG Luxembourg Automotive, comments: “The traditional model is becoming outdated, as it increasingly faces disruption—thus, car dealers need to reinvent their profession and their offerings. Customers are better informed, they know what they want, and their needs have changed. For example, they are becoming more interested in ‘service factories’, or adjacent services such as facilities management, financing solutions, mobility solutions, and mobility-as-a-service offerings (leasing, car-sharing, ride-sharing, etc.) In parallel to these changes, technologies like artificial intelligence are starting to mature, promising huge changes to how business is done and to how customers experience cars and driving.”
Julien Baudouin, Senior Manager Intelligent Automation lead at KPMG Luxembourg, adds: “Up and down the supply chain, artificial intelligence is promising to transform the norm. The trend is firmly headed towards advanced AI and robots working alongside humans to create new customer experiences for drivers. This has implications across the customer journey, from chatbots providing helpline services, to newly automated back-office tasks, to novel and exciting capabilities in the cars themselves.”
The survey also discovered that expectations for a mobility and logistics ecosystem are increasing: 60% of executives (a higher percentage than ever before) agree that, in the future, we will no longer differentiate between the transportation of humans and goods. Ugo Platania explains: “Companies will need both to rethink their business models and to cooperate with each other to create a mobility ecosystem. The company offering the best customer experience to people and goods will likely own the platform.”
Whereas OEMs once felt they were in charge of their own technological agendas, this no longer true: three quarters (77%) of executives noted that these agendas are now essentially set by the regulator. Ugo Platania notes a few regional differences: “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 CEOs feel the same.”
Regarding the Grand Duchy, Bruno Magal, Senior Manager at KPMG Luxembourg Automotive notes a particular issue in need of regulation: “In Luxembourg, the level of CO2 emissions is one of the highest in Western Europe. With 400,000 cars on the roads of Luxembourg, measures need to be put in place to allow a decrease of CO2 emissions.”
Bruno elaborates further on Luxembourg’s auto industry: “The Luxembourg automobile landscape is constant in its eccentricity. Despite the known difficulties with heavy traffic and the enhancement of public transport services, the ratio per inhabitant remains one of the highest in Europe and the car remains an important commodity for individuals—much more so than for the average EU resident. Luxembourgers’ favorite brands remains VW, BMW, and Audi, and while the car fleet here has gotten slightly older it is still the youngest in the EU.”
Ugo Platania comments: “Shifts in fuel type and incentives to reduce diesel fuel do not seem to have benefited alternative fuels. Price is still one of the key inhibitors to the popularity of alternative fuels, certainly—but there is also a lack of knowledge, among consumers, on alternative cars. As the industry matures, we hope to see more interest in alternatives.”
Participants in the survey strongly agree that creating and perfecting electric vehicles, in the face of important and high environmental standards, is a crucial goal.
© 2021 KPMG Luxembourg, Société coopérative, a Luxembourg entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.