Automakers adapt to new global trends

10 January 2013

NEW YORK: Major players in the auto sector are using innovation, marketing and branding as they respond to megatrends like urbanisation and mobility, a poll of leading firms by KPMG has found.

The consultancy surveyed 200 executives from premier corporations worldwide, of which 88% saw developing new products and technologies being an effective growth strategy over the period to 2018.

Entering new markets logged 81% here, ahead of improving affordability on 76%, offering pricing and sales incentives with 75%, diversifying portfolios on 63% and strengthening brand management on 59%.

For 75% of participants, building partnerships was a key objective, while 68% cited organic growth and 70% pointed to expanding the value chain. Mergers and acquisitions hit 52% and working with firms from "converging industries" secured 48%.

An extra 58% planned to boost their marketing and brand management spend in the next five years, as did 49% for "connectivity and infotainment" and 47% for consumer electronics interfaces.

Fully 72% of the panel said "mobility as a service", from car-sharing and short-term rental services to electric cars and in-car apps for geo-location and payments should gain traction in the next 15 years.

Exactly 77% of the sample thought brand reputation would be central in supporting such services, which may become more important as 72% believe alternatives to car ownership will arise in big cities.

"A new frontier is opening in the realm of mobility services, with the potential to dramatically reshape not just the competitive landscape, but also the way people interact with vehicles, and, indeed, the future design of roads and cities," said Gary Silberg, the Americas head of automotive for KPMG in the US.

Fuel efficiency was seen as the main consumer purchase motivator by 92% of the panel, ahead of safety innovation on 78%, ergonomics on 77%, eco-friendly credentials on 71% and "styling" on 64%.

Online dealers and intermediaries were predicted to play a more important role by 64% of executives, beating multi-brand dealerships owned by third parties on 63% and independent dealers on 46%.

When naming the brands likely to boost their market share from 2013–18, Volkswagen received a net score of 78% from participants. BMW, its German compatriot, and BAIC, a Chinese firm, both hit 65%.

SAIC, also from China, registered 51% on this metric, with its national counterparts FAW on 42% and Geely on 40%. Hyundai Kia, a Korean group, was sandwiched between these operators on 47%.

Data sourced from KPMG; additional content by Warc staff