With the start of the Motor Show in Brussels today, KPMG launches the 19th Global Automotive Executive Survey (GAES). For this edition, nearly 1,000 executives from the automobile industry and nearly 2,500 consumers were interviewed worldwide to share their views on how they see the auto industry evolving in the future. The KPMG survey clearly reveals that data remains one of the biggest challenges for the sector. The survey predicts that by 2030, the production of cars in Western Europe will fall from 16% to 5% of the worldwide production. But for Belgium this prediction must be taken in perspective.
According to this, the 2018 edition of GAES, the percentage of cars assembled in Western Europe will fall from 16% to less than 5%. This was the view of 74% of the respondents from the auto industry itself. However, KPMG would like to put these figures in perspective for the situation in Belgium. Mobility expert Frank Vancamp: "The context for the two car manufacturers in Belgium is different. Both manufacturers have announced that their locations in Ghent and Forest will start producing electric and/or hybrid cars in the near future. The negative trend in Western Europe would not necessarily mean a similar evolution for the two manufacturers in our country."
The GAES also shows that diesel combustion engines will not immediately disappear in the coming years: 50% of the respondents from the auto industry indicate that diesel will continue to be a technologically viable option also in the future. Frank Vancamp: "The end of the diesel age is not immediately in sight yet, even though various policy makers and people in society have predicted it. In our country, the duties on diesel will continue to rise in comparison to petrol, of course, and diesel cars, while they are more expensive to buy, use less. With company cars, we are seeing that diesel is losing in popularity, but for people who need to travel long distances, it continues to be an interesting option."
For years now, GAES has shown that data will dominate the auto industry. Connectivity and multimedia provisions will become deciding factors for consumers when choosing a car. Around 2019 or 2020, 5G will most likely also be rolled out in Belgium: a technological development which is essential in connecting cars. Frank Vancamp: "We can expect that manufacturers will jump on the 5G bandwagon. But this will also bring new challenges with it, such as data protection. The protection of computer data against such risks as loss of data or having this data fall into unauthorized hands must be at the top of the agenda for car manufacturers."
Other technological developments like the self-driving car will also bring new challenges: 74% of the respondents from the car industry indicate that a mix of autonomous and non-autonomous vehicles could generate problems for traffic safety. "In the beginning, the technology will not be developed enough to predict the behavior of other road users. This has consequences for traffic safety - policy makers and police forces - but also for the insurance business which will have to adapt to this new situation."
GAES also comes with findings concerning the use and ownership of cars. The focus will evolve towards flexible mobility instead of car ownership whereby Total Cost of Ownership ("TCO") will become one of the most important motives. Vancamp: "Cars are becoming less and less of a status symbol. According to GAES, 55% of the consumers have indicated that they would be willing to give up their car if alternatives were available." This is why car sharing has been on the rise for several years now, and the same is true in Belgium. The sector's own figures show that over 30,000 Belgians make use of this kind of transportation, double the amount compared to 2016.
But, there is also demand for a combination of different transport modes in one package. Frank Vancamp: "The cash-for-car scheme that the federal government has recently implemented to curb the number of company cars is not a sustainable alternative. Cash-for-cars is purely a tax measure, and not a mobility solution. If you want a real change in behavior, steering from employers and the government will be required: a real package." Other changes to the Summer Agreement will also influence the tax cost of cars for companies and individuals beginning in 2020 with, among others, the battle against the so-called 'fake' hybrid cars.
© 2020 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.