KPMG survey: Auto executives balance optimism about growth against supply chain concerns and labor shortages

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 labor shortages are of great concern.

KPMG’s 22^nd Annual Global Automotive Executive Survey of 1118 executives across automotive and adjacent industries found that 53% are confident that the industry will see more profitable growth, compared to just 38% 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% of respondents were “extremely” or “very worried” about the supply of these materials. Furthermore, 55% of executives are very or extremely concerned about labor shortages.

“There are urgent questions executives need to answer right now: Have they learned recent lessons to build more resilient supply chains and address labor shortages?”, Silberg said. “Auto manufacturers are competing for talent not only among themselves but also against other industries. We will likely see executives taking lots of time in the coming years to problem solve these risks.”

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% of executives expect consumers to require charge times under 30 minutes when traveling. 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%), but the majority still support such programs (91%).

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% 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% of vehicles will be sold directly by automakers to consumers, bypassing dealers.

With the move to digital commerce, executives expect that automakers will monetize the vast amount of data they will collect; 43% expect that automakers will sell data to auto insurance companies.

In Thailand, more than 2 million automobiles were produced in 2019, with over half of those exported. However, due to COVID-19 restrictions, production rates dropped to 1.4 million vehicles in 2020, with just over 700,000 exported. 

Thai version: ผลสำรวจเคพีเอ็มจี: ผู้บริหารธุรกิจยานยนต์มองว่าอุตสาหกรรมจะเติบโต แม้ว่าจะยังมีความท้าทายเรื่องห่วงโซ่อุปทาน และการขาดแคลนแรงงาน

KPMG conducted a global survey of 1,118 executives across automotive and adjacent industries in August 2021, including 372 CEOs, 325 other C-level executives, heads of business units and departments and managers. About a quarter (24%) work for car manufacturers, and 13% for Tier-1 suppliers. Truck manufacturers employ 11% of respondents. Companies with annual revenues of more than $10 billion in 2020 employ 27% of respondents, while 35% have annual revenues between $1 billion and $10 billion and 38% have revenues less than $1 billion.

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
E: ploi@kpmg.co.th