US Car Makers Fear Low Cost Rivals, says Survey

11 February 2005

The bosses of the America's carmaking giants say low-cost competition will be the biggest threat to their businesses over the next twelve months.

A global survey by PricewaterhouseCoopers reveals that high oil prices and the loss of top talent from the companies are other major concerns for automotive ceos.

Despite these worries, however, the industry has seen recent expansion. In the last year, sixty six percent of ceos have accelerated expansion plans, sixty three percent have increased R&D and half have opened new plants or offices.

Says Stephen D'Arcy from PwC: "The best automotive companies are putting methods in place to capitalise on the enormous opportunity presented by low cost and rapidly growing economies," - precisely in the regions where the feared low cost competition is located.

The survey shows China to be the most popular place for development, with India second. Forty-nine percent of ceos are already "offshoring" non-core business functions.

A separate survey by researchers JD Power says the market for hybrid vehicles - those run on gasoline or diesel and on electricity - will top out at around three percent of the US car market by 2011, with price premiums a major factor.

Data sourced from (UK); additional content by WARC staff