2015 Report v1 PDF

technological fit
KPMGs Global
Automotive
Executive
Survey
2015
Who is fit and ready to harvest?
kpmg.com/GAES2015
How do we cut through complexity?

View the interactive version of this
survey online and filter the results
based on your own preferences
KPMGs Global Automotive Executive Survey 2015
Acknowledgements Foreword
The Global Automotive Executive In coming years the automotive sector will need to achieve a fine balance
Survey is KPMG Internationals annual between its traditional product- and technology-driven past and its potentially
assessment of the current state and
ubiquitously connected consumer lifecycle-centric and service-driven future.
future prospects of the worldwide
automotive industry. In this years
survey, 200 senior executives from As this years survey findings now in its 16th consecutive year.
the worlds leading automotive demonstrate, the industry seems Wehave placed the findings online
companies were interviewed, tobe positioned halfway between and made them interactive, enabling
including automakers, suppliers, these two imperatives. On the one you to not only digest our general
dealers, financial services hand, increasingly strict regulatory conclusions, but to also draw your
providers, rental companies standards call for a strong focus on own inferences for your specific
and mobility solution powertrain optimization, rationalization areaof interest, all of which should
providers. The responses and standardization. On the other, help you cut through complexity
were very insightful and we increasingly tech-savvy customers andextract the maximum value
would like to thank all those arehelping to create a completely foryour business.
who participated for giving new mobility culture.
us their valuable time. I personally invite you to get involved
Special thanks to Moritz Tomorrows consumers will not only and access our online version of the
Pawelke and his team for expect, but demand new and survey at kpmg.com/GAES2015.
their efforts. innovative services and mobile apps
that plug seamlessly into ubiquitously Enjoy the read!
connected solutions. To stay ahead,
traditional automotive players may
need to reinvent their business
models and ask themselves
twopressing questions: how do
Ibecome a high value service brand,
while making the most of my strong
product and engineering heritage?
and secondly, how do I think about
my brand from a consumer
perspective, to attract the new
generation of digital natives? Dieter Becker
Global Head of
It is not just the automotive industry Automotive
that is changing; so has our survey, KPMG International
2 | KPMGs Global Automotive Executive Survey 2015

Contents
Executive summary 4
About the survey 6
Mobility culture 8
What is driving consumer demand?
Technological fit 16
Are companies betting on the right technologies?
Business model readiness 26

Is the industry set for an unstable mobility eco-system?
Prepared to harvest 34
Who is best positioned for sustainable growth?
KPMG Global Automotive thought leadership 38
2015 KPMG International Cooperative (KPMG International). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. KPMGs Global Automotive Executive Survey 2015 | 3
Executive summary
Key trends to 2025 Vehicle segment Investment E-car market
preferences priorities to 2020 penetration to 2025
Many innovative key trends
are lower on executives The small and basic car Downsizing is still the High e-car market share
agendas up to 2025: segment is expected number one powertrain forecasts appear contrary to
tohave a high growth investment area over the investment priorities:
The majority of the executives potential in established next ve years:
still feel that growth of andemerging markets The majority of auto execs
emerging markets is the However, since the 2014 from Western Europe and
Mobility number one key trend.
overthe next ve years: Technological survey, auto execs from China believe that the share
culture Only a minority of
Executives from mature
markets predict decreasing
t mature TRIAD markets have
become relatively less
of electried vehicles (among
overall new car registrations)
respondents consider sales potential for the large focused on this area than will be between 11-15
Auto executives alternative powertrain car segment up to 2020, with According to this theirBRIC counterparts. percent. Respondents from
views tend to reect technologies, mobility a more positive view of the years survey, North America are even more
services and vehicle basic and small car segment. The number two investment optimistic, with most
concerns over connectivity as extremely theoptimization priority for both TRIAD and foreseeing a share of
currentcommercial important key trends BRIC market respondents oftraditional BRIC execs is fuel cell between 16-20 percent
challenges, suggesting until 2025. envisage tremendous growth fossilfuel-based vehicles, replacing pure in 10 years.
potential for all car size battery electric technology.
a lack of consensus Please see p8-9 segments in the next ve propulsion Please see p20-21
Please see p16-17
over the shape of the years, particularly small and technologies still
future mobility basic cars. dominates the
Purchasing criteria Connectivity:
eco-system. to 2020 Please see p12-13 technological E-car technology The next big thing
roadmap. trends to 2020
Purchasing choices over Vehicle ownership The notion of self-driving
thenext ve years versus usage Plug-in hybrids are set to cars as the last evolutionary
arenotyet driven by attract the highest demand step of connectivity seems
innovativeconcepts Vehicle ownership for all of all electried propulsion to be more distant than
andonline services: age groups is considered technologies: media attention suggests:
KPMG viewpoint important up to 2020:
Auto executives believe Although still rated as the Auto execs from mature
consumers are still xated Most respondents believe most important e-technology, Asiancountries like Japan
Auto execs are
on traditional product issues, vehicle ownership will still be plug-in hybrids popularity has and Korea are slightly more
caught between optimistic about autonomous
with fuel efciency rated important for under-25s, while diminished year-on-year.
regulations that clearly as number one, those aged between 25-50 driving, believing there will be
create technological closely followed by safety are expected to be even more Battery electric vehicles a breakthrough in the next 20
challenges, and and comfort. reliant on their own cars for remain in number two years. Respondents from
personal mobility. position. However, in contrast Western Europe, North
satisfying the target to prior years, a higher
Compared to the 2014 survey, America and China are
group of tech-savvy executives see a heavily Mobility services are forecast proportion of respondents morehesitant.
mobility consumers, increased emphasis on to be an important source of believe demand for fuel cell
that are never ofine. enhanced vehicle lifespan, prot in ve to 10 years in electrical vehicles will increase Please see p22-23
most likely due to the both established and over the next ve years.
burst of product recalls emerging markets.
inrecent years. Please see p18-19
Please see p14-15
Please see p10-11
Are companies betting on the right technologies?

What is driving consumer demand?
4 | KPMGs Global Automotive Executive Survey 2015 2015 KPMG International Cooperative (KPMG International). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Business model Readiness for a new Strategies Race for market
disruption ahead? mobility eco-system to survive share until 2020
No major business model Traditional automotive OEMs key survival strategy In the medium term,
change or disruptive event OEM brands should matter is to achieve and maintain traditional OEMs are
is expected over the next most in 10 years time: global reach. forecast to maintain their
ve years: dominance. However, they
Auto execs believe For globally established should prepare for a more
Most auto execs believe it is extremely likely that OEMs, such as BMW,
Business thatoriginal equipment automotive premium and Volkswagen and Toyota, Prepared to disruptive future.
model manufacturers (OEMs)
willcontinue to own
mass market brands will
dominate over the next
remaining independent is
thetop priority.
harvest Auto execs are most
optimistic that the
readiness thecustomer relationship decade, followed by pure Hyundai group will increase
upto 2020. e-car manufacturer brands. OEMs with limited global Executives feel there its global market share.
reach, mainly from China will be no major shift
Executives are very Please see p26-27 Brands from the ICT sector andmature Asian countries, Volkswagen is considered
optimistic that are predicted to be more are most likely to merge with of power between tohave far greater potential
Business and investment
traditional automotive strategies should remain
important than traditional others in order to survive. OEMs until 2020. than its closest competitors,
Tier1 supplier brands. Toyota and GM.
players can cope with conservative until 2020: Please see p32-33
an increasingly Global players like Daimler, When it comes to Chinese
Organic growth is expected BMW and GM are considered OEMs, respondents rate
unstable mobility tobe the number one to be best prepared, closely Chery as having the best
eco-system in the strategy for future success, followed by Volkswagen, chance of increasing market
with two-thirds of auto Toyota and Ford. share up to 2020.
short term. execsrating this factor
asextremely important. In the executives eyes, Tata, another emerging
newcomers like Tesla still OEM,is rated very positively
Since 2014, an increasing have a huge gap to close and is expected to grow its
KPMG viewpoint number of respondents feel it toachieve the awareness market share.
will be necessary to diversify andreach of traditional
and expand the value chain Please see p34-37
Future automotive
and cooperate with players
OEMbrands. KPMG viewpoint
business models should from converging industries, Please see p30-31
view the customers tocope with a mobility Auto companies should choose the core
wider lives beyond eco-system that is becoming competencies around which to center
theirrole as drivers, more and more unstable. their future business model. Will success
building up a personal Please see p28-29 come to product-driven hardware
relationship toincrease manufacturers or brand-driven, integrated
loyalty, in order to stay mobility solutions providers?
on top ofthe longer-term
customer interface.
Who is best positioned for sustainable growth?

Is the industry set for an unstable mobility eco-system?
About the survey
200 senior executive respondents 2 Czech Republic
2 Hungary
1 Sweden 3 Poland
1NNorway 2 Romania
1 Belgium
16 Germany
ny
1 Switzerland 15 Russia
1 Netherlands
1 Canada 8 UK
8 France 8 South Korea
1 Spain
20 USA 16 Japan
6 Italy
25 China
15 India
4 Mexico
2 Thailand
5 Turkey
2 Colombia
2 Egypt
2 Indonesia
20 Brazil
4 Australia
2 South Africa
4 Argentina
TRIAD NA USA, Canada, Mexico BRIC SA Brazil FOLLOWER SA Argentina, Colombia

MARKETS Germany, Spain, France, UK, Italy, Belgium, MARKETS MARKETS
WE Netherlands, Sweden, Norway, Switzerland EE Russia RoW Australia, Egypt, South Africa
Japan, South Korea Czech Republic, Hungary, Poland,
MA I&A India EE
Romania, Turkey
CN China I&A Thailand, Indonesia
47% of survey respondents from TRIAD markets 38% of survey respondents from BRIC markets 16% of survey respondents from follower markets
Note: Percentages may not add up to 100 due to rounding Source: KPMGs Global Automotive Executive Survey 2015
DEMOGRAPHICS
200 senior executives a clear picture of who they are and where they are from About the survey
Respondents by job title

Respondents by company type
Survey respondents
5% 2% 7%
Vehicle
Manufacturer (60) (60)
30% Two hundred automotive executives
participated, over half of whom are
CEO/President business unit headsor higher. The
Supplier 40% (80) respondents come from allparts of the
C-level Executive
automotive value chainincluding vehicle
45% Business Unit Head
Dealer 10% (20) manufacturers, Tier1, 2 and 3 suppliers,
dealers, nancial services providers, and
Financial mobility service providers (including auto
Business Unit Manager
Services Provider 10% (20)
rental and car sharing companies).
Head of Department Thirty-seven percent of the executives
Mobility
Service Provider 10% (20) are based across Western and Eastern
Europe, with 13 percent in North
42% America,13 percent inSouth America
and13 percent in China.
Over two-thirds of all participants
represent companies with annual
Respondents by regional cluster
Respondents by company revenue
revenues greater than US$1 billion.
Nearly40 percent of all respondents are
from companies with an annual revenue
Western Europe (WE) South America (SA) Mature Asia ofmore than US$10 billion.
44 (22%) 26 (13%) (MA) The respondent interviews, which were
24 (12%)
18% conducted by phone, took place in July
and August 2014.
North America (NA) To nd out more details about

25 (13%)
this years survey respondents,
India & ASEAN
(I&A) 39% 33% Over $10 billion
please access the interactive online
19 (10%) version of this survey on kpmg.com/
Eastern Europe (EE) $1 billion - $10 billion GAES2015.
29 (15%) China (CN)
25 (13%) $500 million - $1 billion
Rest of World (RoW)

10% 2% $100 million - $500 million
8 (4%)
Less than $100 million
Mobility culture
What is driving
consumer demand?
The winds of change are sweeping Against this backdrop, auto executives appear to be focused on The survey participants believe that: customers key priority is fuel
traditional concerns such as optimization of fuel-driven combustion efficiency, which is in line with their expectation that sales for small
through mobility culture, with engines and cost efficiency programs, trusting that emerging markets and basic models will be particularly strong; and, although car
growing demand for new services will be the main growth drivers for a long time to come. ownership is predicted to remain high across all age groups, mobility
from evermore sophisticated This mindset could leave the main players highly vulnerable to new services such as car sharing are expected to see profitable growth
competitors eager to attract the customer of tomorrow, by owning within the next decade.
customers not just in mature innovative concepts like mobility services and vehicle connectivity
markets but around the world technologies. Only time will tell if the respondents views on a number
of issues prove to be accurate.

KEY TRENDS TO 2025
Importance of key trends for the automotive industry Mobility culture
Innovative long-term concepts are not high on executives agenda
Survey results
56%
52%
The auto executives agenda is dominated

49%
by traditional trends such as growth in

48%
emerging markets, optimizing the internal

combustion engine, standardized
43%
42%
platforms and rationalized production.
41%
40%
Newer, industry-changing
developments such as self-driving cars,
38%
36%
36%
connectivity, urban vehicle design and

mobility services are still considered as
relatively less important.
26%
KPMG viewpoint
The survey results show that auto players
20%
are adapting to regulatory restrictions on CO2
19%
18%
18%
18%
18%
18%
emissions, and are aware of the signicant
16%
16%
16% impact of cost pressures and portfolio shifts.
14%
13%
13%
However, in the face of growing
12%
environmental pressures, it is surprising
9%
that battery electric mobility and fuel cell
8%
electric mobility have signicantly
decreased in importance since the
5%
3%
corresponding 2013 survey.
The respondents may be underestimating
2013 n/a
2013 n/a
2013 n/a
the effect on their business models of
2013
2013
2013
2013
2013
2013
2013
2013
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
changing mobility needs. A majority seem to
Market Downsizing Increasing use Rationalization Fuel cell OEM captive Innovative Mobility-as-a- Battery electric Connected car Self driving underplay the importance of connected car
growth in and of platforms of production electric nancing urban vehicle service mobility technologies cars/ technologies and automated driving, even
emerging optimization and in Europe mobility and leasing design Autonomous
markets of the internal standardization and shifting of concepts cars though these developments are at an
combustion of modules the production advanced stage and receiving plenty of
engine (ICE) to emerging
markets industry and media attention.
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11
Note: % of respondents rating a key trend as extremely important. N/a answer not included in respective year Source: KPMGs Global Automotive Executive Survey 2015
KPMG insight
Understanding what consumers want

Concerns over vehicle quality have for comfort, which is slightly at odds
Gary Silberg risen following several high-prole with the quest for better mileage, as
The Americas Head product recalls, with more and more more energy is needed to power the
of Automotive customers now seeking vehicles with associated technology. In building
KPMG in the US longer lifespans. OEMs have to more efcient vehicles, automakers
maintain a careful balance between will have to focus not just on the
product quality and cost optimization. powertrain, but also on the
The intense cost pressures on communications infrastructure.
suppliers in recent years, combined A further consequence of connected
with the increased use of platform driving is concern over safety, as
strategies, have raised the risk of travelers cede control of the vehicle.
quality problems. Finally, vehicle styling and exterior
Markets of all levels of maturity are has risen sharply in importance
seeing growing demand for state-of between 2013 and 2015. Regardless of
the-art technology in vehicles. The what is on the inside, customers still
relatively low priority assigned to want to buy from trusted brands that
connectivity does not resonate with reect their own self-image.
the growing consumer expectation
of ubiquitous access to mobile
online services.
The high emphasis on fuel efciency
and enhanced vehicle lifespan shows
the rising prevalence of the idea of
total cost of ownership (TCO) for
private consumers.
Our respondents believe that
consumers still have a strong desire
PRODUCT ISSUES
Importance of vehicle features to consumer purchase decisions until 2020 Mobility culture
Purchasing choices not yet driven by innovative concepts and online services
Survey results
#1 #2 #3 #4 #5
Fuel efciency Enhanced vehicle Safety innovation Ergonomics & comfort Environmental Auto executives believe that consumers are
lifespan friendliness still xated on traditional product issues like
fuel efciency, safety and comfort.
One factor that has leapt in importance
is enhanced vehicle lifespan, which was
ranked just eighth in 2013, but is now the
second most important factor inuencing
the buying decision.
Although both rank relatively low on
consumers wish lists, there is still a
preference for plug-in rather than vehicle-
bound internet connectivity solutions.
67% 66% 68% 53% 45% 19% 52% 48% 46% 49% 36% 47% 41% 38% 35% The use of alternative fuel technologies
2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 remains a lower priority, suggesting
strongly that, like last years survey, the
#6 #7 #8 #9 #10 consumer purchase decision is driven
more by the wallet than the conscience.
Vehicle styling/exterior Plug-in solutions for Vehicle-bound internet Telematics/personal Use of alternative fuel
navigation, speech connectivity & built-in assistance services technologies such as fuel
recognition & mobile technologies such as cell electric power, bio
To nd out more details about
internet devices (e.g. navigation, speech fuels, solar power etc.
iPhone, Blackberry) recognition etc. the views of our respondents by
stakeholder group or regional cluster,
version of this survey on kpmg.com/
GAES2015.
40% 34% 23% 38% 39% 20% 24% 26% 17% 19% 16% 11% 18% 15% 21%
2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013
Note: % of respondents rating a product issue as extremely important Source: KPMGs Global Automotive Executive Survey 2015
KPMG REALITY CHECK ON SURVEY FINDINGS AND OUTLOOK
Light vehicle sales forecast by segment market share | 2011-2020

Segment prospects
111m
The good news for the industry is that all 107m Unclassied
6%
segments are predicted to increase in .1% 104m
R+4 6%
volume. Within the next two years, global CAG 100m 6% 8% MPV & Van
vehicle sales will pass the magical 100 95m 8% CAGR + 1.9%
million mark and continue to rise until 6%
90m 8%
the end of this decade, on the back 7%
of increasing demand in emerging
87m 8%
84m
7%
17%
Pick-up & SUV
markets like China. 8% CAGR + 4.3%
81m
7% 17%
Yet, as the next page shows, the 7% 8%
majority of auto executives cling to the
77m
17%
7% 8% 17%
expectation of growth of small and basic 7% 8% 2% Sports CAGR + 4.5%
17% 2% 3%
vehicles so-called budget cars based 9% 2% 3%
Large (-Plus) CAGR + 3.3%
17%
upon a historical preference for such 10% 2%
3%
9% Midsize CAGR + 3.0%
17%
automobiles in developing countries. 17% 2%
3% 9%
Formal forecasts for light vehicle sales 17% 2% 3% 9%
present a different picture compared to 3% 9%
2%
17% 1% 3%
9%
that of many of the executives involved in 3%
2%
10%
our survey, with small and basic cars not 3%
10% 1.39%
2% 10% 1.39%
predicted to increase their market share, 3% 1.39%
10% 1.39%
which is set to remain at just six percent. 1.39% 1.39%
32% Compact-size
10% 1.39% 1.39%
Conversely, the compact-sized, pick-up 1.39% 1.39% 32%
CAGR + 6.2%
1.39% 1.39% 32%
& SUV and sports segments are forecast 1.39% 1.39% 1.39%
1.39% 32% 32% 1.39% 1.39%
to outpace overall market growth rates up 1.39% 1.39%
1.39% 1.39% 32% 1.39%
1.39%
to 2020, with compact-sized being the 1.39% 1.39%
1.39%
31% 32% 1.39%
1.39%
1.39% 1.39%
real success story. Almost one-third of all 27% 29% 1.39%
1.39%
1.39%
1.39%
1.39%
vehicles sold worldwide are expected to 1.39%
1.39%
1.39%
1.39%
come from this segment in 2020. This 1.39% 1.39% 1.39% 1.39% 1.39% 1.39%
puts the spotlight on recent efforts by
global OEMs to invest in small budget Sub-compact-size
cars in the BRICs and other high-growth 20% 18% 18% 18% 18% 18% 19% 19% CAGR + 3.8%
17% 17%
territories, with a question mark hanging
over the long-term sales volume and
margin potential for this segment. Small & basic
6% 6% 6% 6% 6% 6% 5% 6% 6% 6%
CAGR + 2.6%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Note: % - segment market share; CAGR compound annual growth rate; Percentages may not add up to 100 due to rounding; in million units
Source: KPMGs Competence Centre Automotive, LMC Automotive
CONSUMER DEMAND
Development of vehicle size segments until 2020 Mobility culture
TRIAD executives no longer believe in large car segments is this the end of a trend?
Survey results
Basic and small 81% 15% 4%
Sub-compact 75% 16% 9%

Most auto executives from the TRIAD
markets anticipate a signicant drop in
Compact 61% 23% 16%
sales of larger cars, which could signal the
end of an era.
TRIAD Midsize 49% 41% 10%
BRIC executives are particularly
VIEWPOINT
Large & optimistic, with a majority expecting
25% 34% 41%
Large Plus signicant growth in all car segments,
although sales of small, basic and
Sports 30% 35% 34% medium-sized cars are predicted to
increase faster than larger segments like
Pick-up & SUV 27% 42% 31% limousines, pick-ups & SUVs.
MPV & Van 27% 51% 22%

KPMG viewpoint
Basic and small 79% 11% 11% The expected fall in sales of larger vehicles
is probably rather due to the stricter
Sub-compact 75% 24% 1%
environmental restrictions than to any
decline in popularity of bigger cars.
Compact 72% 20% 8% However, buyers are likely to switch back as
soon as oil prices drop further (a probable
BRIC Midsize 73% 24% 3% scenario). More efcient powertrains, like
VIEWPOINT hybrids, could also signicantly reduce the
Large &
57% 31% 13% total cost of ownership.
Large Plus
The interactive online version
Sports 60% 20% 20% of this survey on kpmg.com/
GAES2015 reveals regional differences
Pick-up & SUV 59% 23% 18% among auto executives opinions:
North American respondents views are
MPV & Van 53% 26% 21% notable and surprising, with 92 percent
forecasting an increased demand for small
and basic cars.
In China, on the other hand, sports
Note: Percentages may not add up to 100 due to rounding cars sales are expected to grow strongly,
Note: % of respondents expecting a car segments market Remain
Increase the same Decrease reecting a fast-maturing consumer with
share to increase/remain the same/decrease until 2020
Source: KPMGs Global Automotive Executive Survey 2015 evermore sophisticated tastes.
CONSUMER PREFERENCES
Importance of vehicle ownership for personal mobility needs
Importance of vehicle ownership undisputed across all age groups
Survey results Consumers younger Consumers from Consumers from Consumers

than 25 years 25 to 35 years 35 to 50 years 50+ years
78%
According to the auto executives in our
72%
survey regardless of which part of the
value chain they represent people of all
45%
45%
Vehicle
38%
ages will continue to desire their own set of
35%
manufacturers
23%
wheels. Although the younger generation is viewpoint
20%
17%
13%
considered more open to alternative
8%
5%
mobility solutions, the respondents still
feel that under-25-year-olds are keen to
possess a vehicle.
100%
95%
Even the nancial services and mobility
80%
80%
service providers whose business
model is largely focused around vehicle
100%
usage rather than ownership are Dealers
suggesting that their customers will still viewpoint
want to own cars.
20%
15%
5%
5%
KPMG viewpoint
0%
0%
0%
0%
Despite a universal preference for
possessing ones own vehicle, the main
90%
85%
auto players need to consider carefully Financial
which user segments are most susceptible services and
65%
65%
to alternatives. With increasing vehicle mobility
restrictions in inner city areas, and a greater services
awareness of total cost of ownership, more providers
30%
30%
viewpoint
and more customers are likely to reappraise
15%
whether to have their personal set of
5%
8%
5%
3%
0%
wheels. Consequently, all mobility
stakeholders should be ready to offer
easy-to-use, price-competitive solutions. Important Neutral Not Important Neutral Not Important Neutral Not Important Neutral Not
important important important important
The under-25-year-olds may appear to
be the most obvious target, but with
mature markets in particular experiencing Important Neutral Not important
aging populations, those over 50 could
also be seeking better and cheaper ways Note: Percentages may not add up to 100 due to rounding Important = Respondents answering with Not important = Respondents answering with
Source: KPMGs Global Automotive Executive Survey 2015 extremely important or somewhat important somewhat unimportant or not at all important
to get around.
ON-DEMAND MOBILITY
Share of mobility services in 15 years time, and time horizon for profitability by maturity cluster Mobility culture
TRIAD countries are setting the pace for on-demand mobility services such as car sharing
TRIAD VIEWPOINT BRIC VIEWPOINT
What do you believe

will be the share of
on-demand services
in 15 years time?
12% 11% 35%
Below 5% KPMG Insight
Mirko
6-15%
16% 47%
Hilsheimer
The dawn of
7%
Partner car sharing
16-25% KPMG in China
in China
42%
more than 25%
31% The rapid pace of urbanization in China
should see a rise in car sharing over the
next few years in Tier 1 cities, with
Generation Y consumers being the early
adopters. Nevertheless, the size of this
market will remain small, with Chinese
drivers not yet ready to follow countries
When do you expect like Germany, because Chinese
mobility solutions to consumers still want to own cars.
become an important Car sharing in China has to compete
source of prot? 16% with a diverse range of services, such as
34%
32% short-term car rentals, carpooling and
They are already 11% peer-to-peer driver dispatch services. As
27% mobility concepts evolve, we expect to
In 5 years see new approaches to car sharing,
much of which target the business-to
In 10 years business segment, such as Volkswagens
4%
8% 41% V Rents car pools that are marketed to
> 10 years 27%
various companies. The Chinese market
will develop slowly, although the
Never potential is high in a number of cities.
With limited nancial and political support
from local government, the business
case for car sharing is unproven.
Technological fit
Are companies betting on
the right technologies?
Focusing solely on the further As the mobility eco-system becomes more complex, the main players established and high-growth markets.
must choose between several different, and in some cases conicting Recent marketing initiatives, supported by wide media coverage,
development of the internal
technologies, raising the stakes for critical investment decisions. suggest the age of innovative technologies, like fuel cell vehicles and
combustion engine could mean the By betting too much and too soon on future trends, automakers self-driving cars (a last evolutionary step of vehicle connectivity) is
main global automakers fall behind could lose existing, loyal customers. But if they fail to gain a foothold in rapidly approaching. Despite such signals, most executives in our
new mobility solutions, they risk falling behind competitors. survey do not anticipate such developments becoming signicant in
their more innovative rivals Although downsizing the internal combustion engine remains the the next 20 years.
number one investment priority, such a route leaves automakers
vulnerable to increasingly strict environmental regulations in both
INVESTMENT PRIORITIES
Top powertrain technology investment areas up to 2020 Technological fit
Downsizing is still the number one investment priority

Survey results
Fuel cell Hybrid fuel Plug-in hybrid Battery electried
ICE downsizing
electrical vehicles systems fuel systems vehicles1
46%
Despite the promise of new, cleaner
technologies, automotive executives still
believe downsizing the traditional internal
combustion engine is likely to yield the
32% best results in the short-to-medium-term.
29% When it comes to alternatives, fuel cells
TRIAD 24% have moved ahead of battery electric
VIEWPOINT 19% 19% systems to become the number two
20% 19% 18% priority for investments until 2020.
15% 15%
13%
11% 11%
8% KPMG viewpoint
The interactive online version of
this survey on kpmg.com/
2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 GAES2015 reveals regional differences
among auto executives opinions:
In the past 12 months, respondents
from TRIAD have reduced their interest in
41% 42%
ICE downsizing, which is possibly an
acknowledgment of more onerous
33% regulations on CO2 emissions in their
home markets.
This trend is even more profound among
BRIC 23% 22%
VIEWPOINT 20% 20% the OEM TRIAD respondents, who have
17% already shifted their investment priority from
16%
14% 13% 14% ICE downsizing to hybrid fuel systems.
12%
Such laws are not as well-developed in
8%
7% some emerging markets, hence the relatively
higher priority assigned to ICE downsizing
among the BRIC auto executives.
2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013
Note: % of respondents rating a powertrain investment area as extremely important

Note: 1 With and without range extender
Source: KPMGs Global Automotive Executive Survey 2015
Electrified powertrain production forecast | 2011-2020
Just 4.6% of engine

production to be electric 5.1m
4.9m 0.01%
Full/Mild Hybrid 0.01%
The day when most of us drive fully
electric cars is still on the distant horizon.
0.01%
4.6m
0.62%
4.6%
Plug-in Hybrid 0.60% of total
In 2020, less than one in 20 vehicles 4.1m
0.01% 0.55% powertrain
produced are forecast to be equipped Battery EVs production
with electried powertrains, the majority 3.6m
(with & without range extender) 0.49% worldwide
of which will be only slightly electried
full or partial hybrids. Fuel Cell 0.44%
3.1m 0.99%
While the survey respondents believe 0.80%
0.87%
that plug-in hybrids will generate the most
consumer demand by the end of this 0.38% 0.68%
2.6m
decade, projections show that this 0.53%
segment will make up just one percent of 0.32% 0.36%
total worldwide engine production in 2020.
The excitement over the potential of 0.19%
2.1m
fuel cell electric cars is also likely to be 1.9m
overhyped; by 2020 a mere 0.01 percent 0.18%
0.14% 0.10%
of cars are likely to be equipped with 0.07%
this type of propulsion which equates
to approximately 16,000 fuel cell drive
units per annum.
1.2m 3.00% 2.96%
2.97%
2.86%
To nd out more details about 0.12% 2.76%
2.62%
2.50%
the electric engine production
prospects until 2020 by regional cluster, 2.18% 2.16%
GAES2015. 1.39%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: KPMGs Competence Centre Automotive, LMC Automotive

Note: % - share of overall powertrain production volume in respective year; in million units
CONSUMER DEMAND
Electrified propulsion technology attracting the most demand until 2020 Technological fit
Plug-in hybrids are seen as number one, although losing ground

Survey results
2015 30%
#1 Plug-in
hybrids
2014 35%
When asked to rank the most popular
form of electric technology by 2020,
respondents chose plug-in hybrids,
2013 36%
although the gap with battery electrified
cars has closed to one percentage point.
Fuel cell electric vehicles are the biggest
risers, jumping from just 17 percent in
2013 to 27 percent in this years survey.
2015 29%
Battery
#2 electrified
vehicles1
2014 31% KPMG viewpoint
The announcement that, amongst others,
2013 28%
Toyota is to market a fuel cell electric
vehicle in 2015 has generated considerable
media attention recently, but, as our
powertrain forecasts predict, this
technology is unlikely to gain more than
2015 27%
a tiny proportion of the overall market
Fuel cell
#3 electrical
vehicles
2014 24%
until 2020.
Without a comprehensive refueling
infrastructure, and eco-friendly production
2013 17% of hydrogen from renewable energy
sources, fuel cells remain a long-term
aspiration rather than a commercial reality
in the foreseeable future especially in
less developed regions.
2015 16%
Non-plug-in
#4 hybrids To find out more details about

(Full/Mild/ 2014 12% the views of our respondents by
Micro) stakeholder group or regional cluster,
2013 20% please access the interactive online
GAES2015.
Note: % of respondents rating an electrified propulsion technology as extremely important
Note: 1 With and without range extender
How do we cut through complexity? KPMGs Global Automotive Executive Survey 2015 | 19
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KPMG insight
Whats next for e-mobility in China?

Chinas government and automotive mobility, demand for electric-powered
Danny Le industry both have high hopes that autos is currently restricted to small
Partner
KPMG in China electric cars will signal a new era in the eets for a few government institutions.
worlds fastest growing car market. Not However, growing pressures from air
content with catching up with more pollution, rising fuel costs, strict
established players in traditional emission standards, and rapid
combustion engine technology, China urbanization should ensure that the
aspires to leapfrog rivals to become huge potential for electric cars is
the premier market for e-mobility. With eventually realized, although this will
hard work and not a little innovation, require further innovation and disruption
forecasts suggest that China will meet across the automotive eco-system.
this objective by 2020.
Vehicle and battery cell production is
still in its early stages, with a need for
Chinese rms to improve capabilities in
design and development of core
e-vehicle components. Current electric
models from domestic OEMs have not
proven particularly popular with
consumers. Regardless of these
humble beginnings, China has by far
the worlds largest R&D budget,
indicating a patient, mid-to-long-term
perspective.
Despite strong political funding for
programs across multiple cities, and a
huge population seeking greater
E-CAR MARKET PENETRATION
Share of electrified vehicles among overall new car registrations by 2025 Technological fit
At least every tenth vehicle sold in 2025 to be electric, according to auto execs opinions
Survey results
1-5% 5%
6-10% 20% Nearly half of all North American

Western respondents expect the share of e-vehicles
European 11-15% 43%
to be between 16 and 20 percent of overall
viewpoint
new car registrations in 10 years time.
16-20% 18%
This is a more optimistic view than
21-25% 14% Western European auto executives have,
nearly half of whom believe that the share
will be between 11 and 15 percent.
Chinese automakers express similar
sentiment. More than two-thirds of these
1-5% 0% respondents believe the share of
e-vehicles in their home country will be
6-10% 12% between 11 and 15 percent by 2025.
North
American 11-15% 28%
viewpoint
16-20% 48%
KPMG viewpoint
Electric technology has yet to deliver on
21-25% 12% its early promise, and consequently most
companies have focused their efforts on
improving ICE efciency.
Nevertheless, the results show that the
auto executives still feel that e-cars can
1-5% 4%
thrive, although investors continue to face
considerable uncertainty. The biggest drivers
6-10% 20%
for e-mobility are likely to be regulations and
Chinese tax incentives, rather than actual consumer
viewpoint 11-15% 68%
demand, as governments in emerging as
16-20% 8% well as mature markets strive to create low
carbon economies.
21-25% 0%
Note: Percentages may not add up to 100 due to rounding

KPMG insight
Self-driving is not a future dream but todays reality

When can we expect to see perfect business opportunities to target
Seung Hoon Wi self-driving cars? Most available consumers with infotainment,
Asia Pacic Head
of Automotive forecasts suggest that, by 2020, up to education, healthcare and other
KPMG in Korea 10 percent of all mass-produced services.
vehicles will be driverless. Before such vehicles can become
In the meantime, we are already ubiquitous, a number of issues must
enjoying many of the benets of be claried, such as cost, legal
autonomous driving, including parking responsibility, security and privacy. The
assistance, alerts for approaching substantial investment required for
vehicles, people and objects, trafc this technology could arguably have a
congestion assistance, lane departure very positive return, in terms of
warnings and cruise control. There is increased safety, higher fuel efciency,
also an increasing convergence of and shorter, more productive journeys,
sensor- and connectivity-based where occupants not only get to their
solutions that mimic the human destination faster, but can also work
senses to instruct the car to act as its along the way.
driver would choose, and make As the future rapidly becomes
decisions based upon information todays new normal and consumers
from the surrounding environment. In get accustomed to hands-free
this respect, self-driving cars can be driving, process power rather
positioned as a safer form of motoring, than horsepower may become
reducing the risk of driver error. the biggest differentiator.
These vehicles are far more than
just another way of getting around.
They generate huge amounts of
valuable data about travelers habits
and characteristics, creating new
CONNECTIVITY: THE NEXT BIG THING
Self-driving cars: the final evolutionary step of connectivity Technological fit
Autonomous drivings breakthrough is Global OEMs seen as leading in the field of

further away, according to auto executives connectivity and self-driving cars Survey results
BMW
Western European
5-10 years 11% 24.5%
A commercial market for self-driving cars
viewpoint
11-20 years 20% Daimler 15.5% seems no closer, even though initial pilots
have produced positive results, with plenty
21+ years 43% General Motors 11.5% of coverage in the mass media.
Auto executives from Western Europe,
never 25% Volkswagen Group 10.0% North America and China are the most
pessimistic, and feel it will take more than
Toyota 9.5% 20 years before these vehicles are
5-10 years 4% commonly seen on our roads. In Japan
North American
Tesla 6.0% and Korea, there is greater hope, with an
11-20 years 8% viewpoint
expected time span of 11 to 20 years.
Ford 5.5%
21+ years 60%
Honda 4.5%
28%
KPMG viewpoint
never
FCA 3.5%
Self-driving cars are the nal step of true
Hyundai/Kia 3.5% connectivity, enabling car occupants to treat
5-10 years 0%
their vehicles as true extensions of their
Chery homes, ofces or smartphones, freed from
viewpoint
11-20 years 28% 1.0%

Chinese
the responsibility of driving. The daily

21+ years Nissan 1.0% commute will offer customer relationship
52%
owners incredible opportunities to tap into
PSA 1.0% additional revenue streams.
never 20%
This market will not succeed without
Renault 1.0% overcoming critical legal and liability issues
5-10 years associated with driverless motoring.
17% Google 0.5% With potentially erce competition from
Mature Asian
viewpoint
information, communication and technology

11-20 years 33% Isuzu Motors 0.5% (ICT) companies, traditional OEMs must ask
21+ years
themselves whether they are in-line to be
29% Mitsubishi 0.5% the pace setters in this sector.
never 21% Suzuki 0.5%
Note: Percentages may not add up to 100 due to rounding Note: Industry players ranked #1 according to respondents, sorted in descending order
Source: KPMGs Global Automotive Executive Survey 2015 Note: Percentages may not add up to 100 due to rounding
The next big thing a look into the future
Automakers need to understand what

drives customers behavior
Dieter Becker
Global Head of Communication technologies such and harvest the undoubted potential
Automotive as car-2-car, car-2-infrastructure or of data, OEMs should consider
KPMG International car-2-home may bring signicant customers lives as a whole, rather than
benets to consumers, but these viewing them as drivers only, towards
factors, known collectively as the building a personal relationship to
internet of things simply represent a increase loyalty.
commodity. To capture the real value of Technology also enables predictive
connectivity, vehicle manufacturers product analytics, where automakers
have to use the power of data to get can constantly monitor vehicle
inside customers heads, understand performance and component wear
what drives their behavior and adapt and tear. Such a strategy is supported
business models to ever-smaller target by modularization and standardization,
groups of like-minded individuals. which enables more cost-efcient
Connected car technologies can be production and makes it easier to
a crucial interactive media, especially replace or adapt different parts of
when linked to location, offering not the automobile.
just trafc guidance, but also useful As a warning: development cycles
local retail or leisure options, can differ widely between hardware
personalized news and entertainment, and software, so these
and other services all of which can two areas should be managed
provide a healthy revenue stream. separately, with a central interface
Ultimately, it should be possible to to ensure compatibility.
predict what products and services the
customer is most likely to want.
To move to the lucrative upper
right-hand quadrant (refer to chart on
page 25) the Internet of Behavior
THE NEXT BIG THING
Increased connectivity means increasing convergences between largely separated industry sectors Technological fit
Low
(vehicle
independent)
Facebook News Behavior based cross-selling
INTERNET OF BEHAVIOR
Social Networking & Predictive Consumer
Communication Analytics
Proximity to current business models
Twitter VOIP Location based

cross-selling
Car-2-Infrastructure
INTERNET OF THINGS
Safety & Efficiency Predictive Product
Features Analytics
Car-2-Car Car-2-OEM
High Traffic Collision Continuous monitoring of Real-time residual

(vehicle management avoidance wear & tear components value calculation
dependent)
Moderate Revenue potential for new business models Very high
Source: KPMG Competence Centre Automotive
How do we cut through complexity? KPMGs Global Automotive Executive Survey 2015 | 25
View the interactive version of this survey online and filter the results based on your own preferences | kpmg.com/GAES2015
Business model readiness
Is the industry set for an
unstable mobility eco-system?
As more players join the mobility The unpredictability of new technologies makes it hard to plan crossing sector boundaries, and think out of the box to find ways
market, it is vital for companies to for disruptive changes such as e-vehicles, connectivity and to intelligently expand value chains and diversify. A unique brand
autonomous driving. However, an evolving mobility culture, which becomes even more critical, to differentiate yourself in a market
both diversify and differentiate eschews traditional car ownership in favor of more flexible options, teeming with new competitors from other sectors and offering
to maintain success means that automotive companies must prepare for black swans customers a wider range of products and services.
on the horizon.
As the mobility eco-system broadens, automakers can no longer
rely on organic growth, and will have to build strategic alliances

BLACK SWAN AHEAD?
Likelihood of major business model disruption by 2020 Business model readiness
No major change ahead, as OEMs are expected to continue to own customer relationships
Survey results
How likely is a major business model Who will be the owner of the customer
disruption in the next 5 years? relationship in the next 5 years?
Over half of all auto executives think
it is somewhat unlikely or not likely at all
that a major disruption to existing business
3% 43% models will occur in the next ve years,

Extremely Somewhat 72% 2% with just approximately one in 10
expecting a major change.
likely unlikely OEMs Other
This conservative outlook extends to
expectations of market dominance, with
almost three out of four respondents
expecting OEMs to continue owning the
customer relationship until 2020.
KPMG viewpoint
As an alternative perspective, nearly
4%
one-third confess to being neutral over the
Connectivity likelihood of a disruptive event, implying
provider
that change is at least at the back of many
executives minds.
Breakthroughs such as mobility services
8%
and e-vehicles may be a few years away,
Mobility but that does not mean that these potential
solutions black swans can be taken off the senior
provider management agenda.
Arguably, the current period of stability
could be a great opportunity to prepare for a
very different future. If the main auto
9% 32% 14% 15%
companies fail to get ready now, they risk
Somewhat Neutral Not likely Retailers being overtaken by new competitors, such
likely at all as connectivity service providers, and lose
those all-important customer relationships.

KPMG insight
Spotting a black swan in the dark

As this years survey demonstrates, making the most of my strong product
the world inhabited by future auto and engineering heritage?
Roger Bayly customers is changing fast. It is no Should I build, buy or partner to
Partner
KPMG in the UK surprise, then, that relationships with achieve this goal?
brands and mobility providers are up How do I change my vehicle and
for grabs, with emerging consumers system architectures to enable me to
more inclined to trust a tech company refresh products in a cycle measured
than an OEM to provide an in months rather than years?
autonomous vehicle. Who do I work with to develop these
Given the potential value streams technologies and how do I reconfigure
from connectivity and associated my product development capabilities?
services, it is easy to see why black How do I create the investment
swans are flying overhead in the form capacity to do all of this, while
of new brands and disruptive services continuing to develop and deliver
and products. todays products and maintain returns
But and this is the big but to shareholders? What level of
will these new offerings come from resilience to market, event and
existing, major OEMs or from some volatility risk should I maintain during
other source? And, will key players this period?
from converging industries want to Member firms are seeing our
cooperate, compete or even position clients across the automotive value
themselves at the top of the new chain starting to address these
value chain? questions, and the next few years
With these challenges looming, are going to be fascinating.
OEMs need to ask themselves some
searching questions:
How do I think about my brands from
a consumer rather than an automotive
perspective - to attract the new
generation of digital natives?
How do I learn to be a high value,
branded services business, while

PREPARE FOR THE BLACK SWAN
Most important business and investment strategies Business model readiness
Organic growth considered the number one strategy for future success
Survey results
2015 67%
#1 Organic growth 2014 63%

Two-thirds of respondents see organic
growth as the most important strategy.
2013 24%
In second place is expansion of the
2015 54% value chain and diversication, as
Expansion of the
companies move into new markets
#2 value chain and

diversication
2014
2013 22%
49% such as mobility services.
Interestingly, cooperation with
converging industry players is ranked
ahead of partnerships with other
2015 49% automakers, reecting the growing
Cooperation with
importance of technology and the rising
#3 players from
converging industries
(e.g. ICT sector)
2014 48%
inuence of new competitors.
2013 20%
2015 45% KPMG viewpoint

Corporate partnerships
#4 like joint ventures and
strategic alliances
2014 38% Organic growth alone will not meet the
needs of tomorrows mobility culture, and
2013 34% OEMs must shorten innovation cycles to
bring new products and services to the
2015 30% market. In the crucial battle to attain
Outsourcing of (non)
customers loyalty, automakers will have
#5 core activities to
suppliers/contract
manufacturers
2014 24% tocooperate with companies offering
innovative technologies and services.
2013 18%
Thisinux of new players makes it much
harder to keep control of the interface with
2015 23%
drivers and passengers.
#6 Mergers and
acquisitions 2014 16%
Mergers and acquisitions (M&As)
withpeers are a lower priority, given the
2013 14% associated cost and risks. Even if they are
inclined, traditional automakers may
Note: % of respondents rating a business and investment strategy as extremely important struggleto achieve M&A investments in
Source: KPMGs Global Automotive Executive Survey 2015 theconnectivity and infotainment sector,
dueto the nancial strength of the likes of
Appleand Google.
READINESS FOR AN UNSTABLE MOBILITY ECO-SYSTEM
Most significant mobility stakeholders over the next 10 years
Traditional automotive players set to prevail but are Tier 1 suppliers most under threat?
Survey results
Leading premium
A vast majority of respondents believe #1 market OEM brands

(e.g. Mercedes, BMW)
34% 48% 17% 2%
that the established premium and mass

market OEMs will continue to dominate
the automotive landscape over the
next decade. Leading mass
However, in an unstable mobility
eco-system, Tier 1 suppliers are feeling
#2 market OEM brands
(e.g. Nissan,VW)
32% 52% 14% 2%
the warm breath of new competitors,

with brands from the technology and
communication industry now considered
Pure e-car brands/
equally likely to play a role in the
mobilityspace. #3 sub-brands
(e.g.Tesla, BMW i)
13% 54% 29% 5%
KPMG viewpoint
As the mobility culture evolves, strong brand
image and a premium positioning are the
#4 Software/internet brands
(e.g. Google, Apple, Intel)
5% 17% 35% 36% 8%
best defense against new entrants.

If the ICT sector is not yet able to displace
traditional automakers, then it is certainly
intruding into the territory of Tier 1 suppliers, Traditional Tier 1
as hardware components become evermore
commoditized, and software and services
#5 suppliers (e.g. Continental,
Valeo)
3% 19% 50% 27% 2%
rapidly gain in importance.
To nd out more details about Other technology

the views of our respondents
by stakeholder group or regional cluster,
#6 companies
(e.g. Panasonic, IBM)
2% 14% 30% 40% 15%

GAES2015.
Note: Percentages may not add up to 100 due to rounding Extremely Somewhat Somewhat Not at all
Neutral
Source: KPMGs Global Automotive Executive Survey 2015 likely likely unlikely likely
READINESS FOR AN UNSTABLE MOBILITY ECO-SYSTEM
Automotive OEMs that are considered to be best prepared Business model readiness
Global players such as Daimler, BMW and GM are considered to be the best prepared
Survey results
70%
% of respondents considering OEM to be among the top 5 product and technology-driven OEMs
GENERAL In a fast-changing eco-system, Daimler is

MOTORS seen as the number one brand, closely
followed by GM and BMW. These
60% VOLKSWAGEN BMW companies have successfully positioned
GROUP themselves as product- technology- and
DAIMLER brand-driven.
At the other end of the scale,
50% newcomers such as Tesla still face a huge
TOYOTA uphill struggle to establish a universally
strong brand and technology-oriented
image. Despite its investment in innovation
HONDA FORD and its undeniable large achievements
40% regarding e-car technology, the gap
between established brands and
newcomers could still take longer to close.
30%
KPMG viewpoint
In an unstable mobility eco-system, the
RENAULT
HYUNDAI/KIA relationship between brand, products and
20% technology is becoming more complex. As
MITSUBISHI products and technologies become more
commoditized, brand reputation could be
TESLA FIAT CHRYSLER
the decisive differentiating factor.
AUTOMOBILES
10% (FCA) As mobility players contemplate their
brand strategies for this brave new world,
MAZDA they could consider taking a look at the
direction taken by highly ranked OEMs like
TATA SUZUKI BMW and Daimler and their approaches to
nely balance their activities.
0% 10% 20% 30% 40% 50% 60% 70%
% of respondents considering OEM to be among the top 5 brand-driven OEMs
STRATEGIES TO SURVIVE
Who remains independent, needs to strengthen alliances or has to merge in order to survive?
For globally established OEMs, remaining independent is the number one survival strategy
Survey results
#1 BMW 78% 12% 10%
As they consider future strategies, #2 Volkswagen Group 76% 19% 6%

respondents see the big OEMs primed to
go it alone, rather than partner with
#3 Toyota 65% 28% 8%
others. Even smaller newcomers like Tesla
are expected to remain independent,
#4 Hyundai/Kia 63% 29% 9%
despite the high costs of building a global
brand and reach.
#5 General Motors 60% 24% 17%
Executives from emerging market
OEMs, however, are more likely to favor
#6 Tesla 59% 24% 17%
stronger alliances, to achieve the critical
mass necessary to compete effectively.
#7 Renault 56% 25% 20%
This is mainly due to their lack of
sophisticated products and solutions,
#8 Tata (incl. JLR) 55% 32% 14%
making them highly reliant on know-how
transfer from established global
#9 Nissan 53% 36% 12%
technology leaders from Western
countries, through cooperation.
#10 Ford 52% 30% 18%
The Chinese company considered best
equipped to stay independent is Chery,
#11 Honda 52% 28% 20%
which, interestingly, has a greater global
reach than its domestic counterparts,
#12 Daimler 51% 31% 19%
making it Chinas largest passenger
vehicle exporter.
#13 Chery 47% 36% 18%
#14 FCA 44% 27% 30%
#15 Mitsubishi 40% 40% 21%
#16 Avtovaz 37% 49% 15%
Remain independent Strengthen alliances Merge with other OEMs
Note: Percentages may not add up to 100 due to rounding. Sorted descending by % remain independent Source: KPMGs Global Automotive Executive Survey 2015
Business model readiness
OEMs with limited global reach may have the greatest need for mergers
Survey results
#17 Suzuki 37% 40% 24%
#18 Mahindra Group 35% 47% 19% Respondents believe that certain
Japanese OEMs notably Mazda, Isuzu
#19 BAIC 34%
48%
19% and Fuji Heavy/Subaru are more
disposed to mergers. This is probably due
#20 SAIC 33%

39%
29% to a lack of growth potential in their focus
markets, forcing them to look further
#21 BYD 32%

46%
23% aeld to expand.
#22 Dongfeng 31%

34%
36%
KPMG viewpoint
#23 Brilliance-Jinbei 31% 52% 18% Although the stronger, established OEMs
with global reach are better positioned to
#24 PSA 31%
36%
34% thrive as independent companies, the
instability of the future mobility eco-system
#25 Changan 25%

51%
24% could necessitate a rethink.
Given the need to bet on a range of
#26 Geely 24%

37%
40% different technologies and business models,
alliances could spread the cost and risk,
#27 Great Wall Motor 23%

42%
36% and bring valuable new intellectual property.
This may even apply to largely independent
#28 Mazda 22%

36%
43% global players for whom cooperation is
not an immediate priority.
#29 FAW 20%

44%
36%
More details on the past years
results can be found in our
interactive online version of the survey
#30 Jianghuai Automotive 20%

42%
39%
on kpmg.com/GAES2015.
#31 Isuzu Motors 18%

36%
47% Compared to the 2014 survey, this years
results are more optimistic. In 2014, only
#32 Fuji Heavy/Subaru 12%

38%
51% six companies were thought to have the
strength to survive independently, a gure
Remain independent Strengthen alliances Merge with other OEMs that has risen to 12 in 2015.
Note: Percentages may not add up to 100 due to rounding. Sorted descending by % remain independent Source: KPMGs Global Automotive Executive Survey 2015
Prepared to harvest
Who is best positioned
for sustainable growth?
In the medium term, the As the survey indicates, the winners in the new mobility culture on the back of strategic acquisitions of JLR (Jaguar Land Rover).
will be those companies that achieve the right balance of marketable Hyundais continued rise in market share expected by the majority
traditional OEMs are forecast to technologies and apply the appropriate business models to cater to of respondents, on the other hand, is predicted to stall somewhat
maintain their dominance, but its increasingly tech-savvy heterogeneous customer groups. according to recent market forecasts.
vital they prepare for a more The existing order is not about to be shattered, with the top 10 Nevertheless, the traditional OEMs will need to check their blind
OEMs all forecast to be from mature markets in 2020, and German spots in a proactive way as the tremendous growth in new
disruptive future in the long term manufacturers continuing to dominate the premium end. The main technologies and customization options is likely to completely
changes in market position involve Volkswagen potentially stealing the change the automotive eco-system as we know it today.
number 1 mass market spot from Toyota as of 2016, and Tata rising
FIT AND READY TO HARVEST
Top 20 OEMs expected to increase their global market share until 2020 Prepared to harvest
Executives are most optimistic about Hyundais market share increase
Survey results
#1 6% 17% 78% Hyundai/Kia
Hyundai/Kia is expected to gain market
#2 5% 20% 75% Volkswagen Group
share in the next ve years, according to
#3 10% 20% 71% Avtovaz thisyears respondents.
Just behind is Volkswagen with its
#4 8% 23% 69% BMW nearest rivals Toyota and GM in ninth and
69% 14th place respectively.
#5 14% 18% Chery
Of the Chinese OEMs, Chery is
#6 16% 23% 62% Tata (incl. JLR) once again the most highly rated, while
another company from a high growth
#7 16% 23% 62% Nissan market, Tata, performed promisingly,
#8 9% 32% 60% BAIC ranked in sixth place.
#9 10% 31% 59% Toyota
#10 14% 28% 59% Mahindra Group KPMG viewpoint

#11 16% 27% 58% Brilliance-Jinbei The ranking of who is going to win or lose
market share has always been a frequently
#12 18% 25% 58% Renault quoted result in the history of our Global
#13 20% 23% Tesla Automotive Executive Survey. In order to
58%
give the opportunity to compare the survey
#14 13% 32% 55% General Motors results with the most recent market
forecasts we have included a detailed
#15 17% 32% 52% BYD
reality check on the survey ndings on the
#16 22% 27% 52% Honda following two pages.
To nd out more details about
#17 20% 29% 51% Daimler the views of our respondents
#18 23% 30% 48% Changan by stakeholder group or regional
cluster, please access the interactive
#19 22% 32% 46% SAIC online version of this survey on kpmg.
com/GAES2015.
#20 18% 38% 45% Ford

Source: KPMGs Global Automotive Executive Survey 2015 Decrease Remain stable Increase
Leading mass market OEMs Sales ranking 2011-2020

Not a single emerging market OEM is predicted to make the top 10 by the end of this decade in the mass market segment
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
#1 Volkswagen Group Volkswagen is predicted to take

over Toyotas crown as number one
mass market OEM from 2016
onwards.
#2 Toyota Group
#3 Renault-Nissan Group
GM has lost its leading position,
dropping from rst place in 2011
#4 General Motors Group to fourth in 2014.
#5 Hyundai Group Contrary to the executives highly

optimistic views on Hyundais
prospects, the Korean automaker
is forecast to remain in fth place
#6 Ford Group until 2020.
#7 Fiat Chrysler Automobiles

Chinese automakers are still
unable to make the top 10,
despite technology transfer from
#8 Honda Group leading global OEMs like VW,
Toyota or GM that has beneted
the likes of First Automobile
#9 PSA Group Works (FAW), Shanghai
Automotive Industry Corporation
(SAIC) and Beijing Automotive
#10 Suzuki Group Industry Holding Co (BAIC).
Note: OEMs ranked descending by sales volume in respective year

Source: KPMG Competence Centre Automotive, LMC Automotive
Prepared to harvest
Leading premium market OEMs Sales ranking 2011-2020

German automakers are set to continue their domination of the premium segment
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
#1 BMW Group
German automakers are
forecast to remain dominant
#2 Volkswagen Group in the premium segment up
to 2020 and almost certainly
way beyond.
#3 Daimler Group
#4 Geely Group Geely and Tata occupy the

next two ranks and will outpace
Toyota, thanks to their premium
brand acquisitions (of Volvo and
#5 Tata Group JLR respectively) over the last
couple of years.
#6 Toyota Group
#7 General Motors Group
#8 Renault-Nissan Group
FCA, which dipped out of the

top 10 in 2013, is predicted to
#9 Fiat Chrysler Automobiles
win back its place in the elite
by 2017.
#10 Honda Group
Ford Group
Note: OEMs ranked descending by sales volume in respective year
Source: KPMG Competence Centre Automotive, LMC Automotive
KPMG Global Automotive thought leadership
KPMGs dedicated global Automotive team

works with some of the worlds largest
and most successful auto companies.
OurAutomotive network, linking more than

4,000 professionals within our member rms
around the world, brings together KPMG Audit,
Tax and Advisory professionals to help us take
a comprehensive approach to clients activities
within the industry.
Our services focus on assisting member

rms clients address major issues and
market priorities facing the automotive
industry,including:
Converging industry topics (bridging

knowledge between industries)
Operating business model restructuring
(managing the risks of expansion)
Market entry/segment entry (understanding
cultures and business partners)
Consumer trends (creating new business
models or managing risk e.g. from IT)
Evolving distribution channels (aligning
withcustomer needs)
Reporting, regulation and compliance (using
new technologies from Big Data initiatives
foraudit, tax, deal advice and consulting)
Improving operational efciencies
(generatingeconomies of scale, while
maintainingquality)
KPMGs Global Automotive teams offer

aproactive, forward-thinking service to
clients,helping them take advantage
of thesectors growth potential and
overcomethemain issues and challenges.
Global Automotive thought leadership
Me, My Car, My Life (November 2014)

In this study, KPMG sets out to better understand how the automotive
industry will adapt to and shape the converging worlds of personalized
mobility and the internet of everything.
AutomotiveNow (December 2014)

In emerging markets, competition is erce for Western truck manufacturers.
This is why more and more of them are choosing to cooperate with local
brands and to offer simpler models. But is this the right way to go?
This issue of the AutomotiveNow Magazine gives you a comprehensive
insight of challenges for truck manufacturers in emerging markets.
Practical Aspects of IFRS: a guide for

automotive companies (Spring 2015)
The Automotive IFRS and Indian GAAP report examines the sector-specic
IFRS and GAAP issues and is designed to strengthen the clients technical
IFRS GAAP expertise.
Global Heavy Truck Brand Value Study

(Summer 2015)
KPMGs Global Heavy Truck Brand Value Report will map and analyze all
important truck brands from around the globe, measure the brand attributes
that dene the brand value, and assess which are most important in
dening the individual brand strength.
Contact us
Global Americas Asia Pacific EMEA
Dieter Becker Gary Silberg Seung Hoon Wi Dieter Becker
Global Head of Automotive The Americas Head of Automotive Asia Pacific Head of Automotive EMEA and German Head of Automotive
KPMG in Germany KPMG in the US KPMG in Korea KPMG in Germany
dieterbecker@kpmg.com gsilberg@kpmg.com swi@kr.kpmg.com dieterbecker@kpmg.com
Americas country leaders: Asia Pacific country leaders: EMEA country leaders:
Jeff Dobbs Charles Krieck Megumu Komikado Ulrik Andersen Gavin Maile
Global Sector Chair, KPMG in Brazil KPMG in Japan KPMG in Russia KPMG in South Africa
Industrial Manufacturing ckrieck@kpmg.com.br megumu.komikado@jp.kpmg.com uandersen1@kpmg.ru gmaile@kpmg.com
KPMG in the US
jdobbs@kpmg.com Danny Le Laurent Des Places Fabrizio Ricci
KPMG in China KPMG in France KPMG in Italy
danny.le@kpmg.com ldesplaces@kpmg.fr fabrizioricci@kpmg.it
Ergn Kis Francisco Roger Rull

KPMG in Turkey KPMG in Spain
ergunkis@kpmg.com froger@kpmg.es
John D. Leech Rajeev Singh

Additional key contacts Functional leaders
KPMG in the UK KPMG in India
Moritz Pawelke john.leech@kpmg.co.uk rpsingh@kpmg.com
Roger Bayly Brigitte Romani
Global, EMEA and German Executive
Global Automotive Advisory Leader Global Automotive Tax Leader
for Automotive
KPMG in the United Kingdom KPMG in Germany
KPMG in Germany
roger.bayly@kpmg.co.uk bromani@kpmg.com
mpawelke@kpmg.com
Ulrich Bergmann Axel Thmler
Alana Mohan
Global Automotive Financial Services Leader Global Automotive Audit Leader
Global Marketing Manager Please visit kpmg.com/GAES2015 for a full
KPMG in Germany KPMG in Germany
for Automotive copy of the survey or to use the interactive
ubergmann@kpmg.com athuemler@kpmg.com
KPMG in Canada online tool to filter survey results
aamohan@kpmg.ca
kpmg.com/socialmedia The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely Publication number 132042
information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information Published by Haymarket Network Ltd
without appropriate professional advice after a thorough examination of theparticular situation. Publication date January 2015
Pre-press by Haymarket Pre-press
2015 KPMG International Cooperative (KPMG International), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International Photography and illustration Vetta, View
provides no client services. No member firm has any authority to obligate or bindKPMG International or any other member firm vis--vis third parties, nor does KPMG International have any such Stock RF, Coneyl Jay/Getty Images, 123RF,
authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. Rawpixel/Fotolia.com, Shutterstock

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technological fit

How do we cut through complexity?

2 | KPMGs Global Automotive Executive Survey 2015

About the survey 6

Business model readiness 26

KPMG Global Automotive thought leadership 38

Are companies betting on the right technologies?

Who is best positioned for sustainable growth?

8 France 8 South Korea

TRIAD NA USA, Canada, Mexico BRIC SA Brazil FOLLOWER SA Argentina, Colombia

Respondents by job title

North America (NA) To nd out more details about

Rest of World (RoW)

8 | KPMGs Global Automotive Executive Survey 2015

Innovative long-term concepts are not high on executives agenda

The auto executives agenda is dominated

by traditional trends such as growth in

emerging markets, optimizing the internal

platforms and rationalized production.

connectivity, urban vehicle design and

However, in the face of growing

Understanding what consumers want

Light vehicle sales forecast by segment market share | 2011-2020

Sub-compact 75% 16% 9%

MPV & Van 27% 51% 22%

Importance of vehicle ownership undisputed across all age groups

Survey results Consumers younger Consumers from Consumers from Consumers

TRIAD VIEWPOINT BRIC VIEWPOINT

What do you believe

Downsizing is still the number one investment priority

Note: % of respondents rating a powertrain investment area as extremely important

Electrified powertrain production forecast | 2011-2020

Just 4.6% of engine

Source: KPMGs Competence Centre Automotive, LMC Automotive

Plug-in hybrids are seen as number one, although losing ground

#4 hybrids To find out more details about

Whats next for e-mobility in China?

6-10% 20% Nearly half of all North American

Note: Percentages may not add up to 100 due to rounding

Self-driving is not a future dream but todays reality

Autonomous drivings breakthrough is Global OEMs seen as leading in the field of

11-20 years 28% 1.0%

the responsibility of driving. The daily

information, communication and technology

Automakers need to understand what

Twitter VOIP Location based

High Traffic Collision Continuous monitoring of Real-time residual

Moderate Revenue potential for new business models Very high

Source: KPMG Competence Centre Automotive

26 | KPMGs Global Automotive Executive Survey 2015

3% 43% models will occur in the next ve years,

Note: Percentages may not add up to 100 due to rounding

Spotting a black swan in the dark

28 | KPMGs Global Automotive Executive Survey 2015

#1 Organic growth 2014 63%

#2 value chain and

2015 45% KPMG viewpoint

A vast majority of respondents believe #1 market OEM brands

that the established premium and mass

the warm breath of new competitors,

best defense against new entrants.

rapidly gain in importance.

To nd out more details about Other technology