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Foreword –KPMG’s Global Auto Executive Survey2009 coincided with the unfolding of anunprecedented global economic crisis withprofound implications for the automotiveindustry. The expectations recorded inthis survey reflect the depth of the crisis.
The cautious optimism evident amongautomotive decision-makers in 2007 isgone. In the last quarter of 2008, companiesexpect lower revenues, lower profits,more bankruptcies, and a long cycle ofrestructuring to come. They see moreovercapacity emerging, and they believeinvestment will slow.These lowered expectations are not confinedto the mature automotive economies. In Chinaand India too – economies where growth isstill high – companies believe that productionand sales in the coming five years will beconsiderably lower than previously anticipated.A sharp lowering of expectations is hardlysurprising, given the extent of the currentdownturn and its impact on auto sales. Whatis surprising can be found in the detail. Forexample, the KPMG Survey shows that manyautomotive companies saw today’s crisiscoming: our historical comparisons showthat concerns over the global economy haveactually been rising for the last three years.It is clear that the near future is going to bevery tough for the automotive industry. Yetthe KPMG Survey also shows that long-termconcerns have not greatly changed. Whenasked about long-term trends, opportunitiesand challenges, companies continue to saythey retain a long-term focus on innovationand technology – particularly fuel technologies.The 2009 Survey suggests that innovationand technology are likely to be at the heartof industry efforts to recapture profitability inthe coming months and years. For example,innovation – especially process innovation –is still seen by companies as the best wayto cut costs, rather than attacking directoverheads. Companies also believe thatproduct innovation will be key to rebuildingsales: it is notable that despite the fall inenergy costs during the last few months,expectations of sales of hybrid and otherfuel-efficient vehicles continue to risesharply compared with previous years.And in the midst of pessimism, companiesalso tell us about success. They say thateffective management will be the key tosuccess. They do not believe that it ismarketing or brand power that will pull themout of recession, but the leveraging oftechnology and meeting customer needs.These are difficult times. Yet the KPMGGlobal Auto Executive Survey shows thatmany companies are well aware of thechallenges they face – and that many areready to build on their strengths as theyface those challenges.
Global Chair, AutomotiveKPMG in GermanyForeword