Since the first years of the automotive industry worldwide, it has not experienced enthusiasm like the current one. New propulsion technologies, innovative ways of manufacturing cars and renewed customer expectations are driving radical transformation. At the same time, convergence with the technology industry will only accelerate. It’s a time of rapid innovation, big bets and lots of risks. As the automobile business transforms, there are winners and losers.
It is because of that KPMG periodically conducts a survey of executives in the sector, the results of which allow us to deeply understand the perspectives of these leaders and identify trends that can later be transformed into company strategies. The survey was carried out during October 2023 and 1,041 executives from the industry and adjacent sectors participated. South America contributed 42 executives, mainly directors, and of this subtotal, 9 were from companies based in Argentina.
These are the main results of the responses from Argentine executives:
- 55% He said he was somewhat confident and very confident in achieving profitable growth in the next 5 years.
- 56% showed great concern about a negative impact on the business in 2024.
- 67% He stated that vehicle prices will increase this year between 5% and 10%.
- 42% that in 2030 the traditional sales channel will prevail and 29% will be direct purchases from the terminal (Tesla Model).
- 56% expressed concern about the volatility of raw material prices.
- 88% He stated that he was concerned and very concerned about the labor shortage and the impact on the business that the wage increases will have.
“The development of new technologies, both propulsion and comfort, has incorporated a dynamic into the automotive industry that was unthinkable years ago. Unlike the past, the industry is highly committed to sustainability by reducing the level of emissions. To this we must add the expected changes in the way vehicles are produced and marketed, and in the way we get around. All of this generates challenges whose results we see in the launches of recent years. “Despite the concerns expressed by those interviewed, Argentina continues to offer excellent growth potential for the industry that has historically proven to rise to the occasion,” Explain Carlos BrunoAudit and Assurance partner, responsible for the automotive sector at KPMG Argentina.
Other conclusions from the global survey:
- Less confidence in profitable growth: Around the world, automotive executives are less confident that the industry will achieve profitable growth over the next five years. This is mainly due to concerns about the global economy and rising costs. However, South America is among the regions that showed the greatest confidence in this regard.
- Executives have a more mature view of the transition to electric vehicles (EVs): Estimates of average EV penetration increased between this year’s survey and the previous one. This is observed both in Western Europe, as well as in the USA and China.
- Customer experience is a key differentiator: While performance remains the biggest selling point, a hassle-free experience came in second place this time around. The emphasis on a seamless purchasing experience extends from the purchase of the car to the proper functioning of the software installed in the vehicles, although this factor is a challenge even for manufacturers. The car’s hardware is usually reliable, but the software is not always.
- Caution trumps punctuality: After the disruptions of the past few years, the new norm in supply chain management is becoming much more guided by caution than by “just-in-time.”
- More complex technological challenges: Automakers indicated they feel less prepared than last year to deal with technological innovations such as artificial intelligence, digital twins and advanced robotics.
- Price evolution: 64% maintained that in 2024 prices will rise on average between 5% and 10%.
- Electric cars: China, the United States, Japan and Europe will lead the participation in their electric vehicle markets in 2030.
For Ricardo Roa, leading partner of the automotive sector KPMG in Brazil, ““Faced with so many challenges and opportunities, executives must recalibrate their strategies and take action. To do so, they must diversify their bets, encourage collaboration, prepare to integrate AI into every process and face global challenges.”he concludes.
by RN
