Global auto industry executives are becoming less
apprehensive and ``profitability expectations are starting to
grow,'' a KPMG survey indicates.
Concerns around insolvencies and overcapacity are diminishing
after three to five years of gloom in developed markets, the
international accounting and business services firm said in the
report released Wednesday.
``These positive changes have occurred against a background of a
difficult economic climate, including high oil prices and contracted
credit,'' observed Uwe Achterholt, the German-based global head of
KPMG's automotive practice.
``As such, the importance of the turnaround in mood cannot be
The report suggests that the industry leaving the first phase of
its restructuring process _ deep cost-cutting and a shift of
manufacturing to developing countries _ and is entering a new phase,
which includes ``a renewed focus on sustainability and the
environment, an increase in growth-orientated investment, rising
popularity of passenger cars and fuel-efficient vehicles, and higher
projected sales of hybrids.''
Fifty-eight per cent of the 113 executives polled by KPMG said
the difficulties which have engulfed North American automakers in
recent years will ultimately lead to a positive outcome, making them
more efficient and competitive.''
``This change in mindset appears to indicate that the industry
has seen the bottom of the market and is regrouping with new
technology,'' the report says.
Although 37 per cent of respondents expect volatility over the
next five years, 26 per cent predict rising profits _ up 10
percentage points from previous years.
New markets, new plants, low-cost suppliers and cheaper vehicles
all are seen arising from the vitality of Asia, where 80 per cent of
respondents expect sales in China to top 12 million by 2011,
compared with 16.1 million in the United States last year.
Seventy-four per cent of those polled expect low-priced Chinese
vehicles to be sold in significant numbers in America within a
The biggest increases in global market share are seen going to
automakers from China, South Korea and India.