Automakers steer back towards gas-powered vehicles, finds KPMG Survey

Fuel efficiency trumps the need to be green for cost-conscious driving public

TORONTO, Feb. 11, 2013 /CNW/ - As the love affair with the electric car continues to wane, automakers will focus on improving the efficiency of the traditional internal combustion engine (ICE), while also putting a greater investment in hybrid plug-ins, according to KPMG's 14th annual Global Automotive Executive Survey.

"Costly batteries, comparatively low driving distances and availability of recharging stations have slowed the charge towards electro-mobility," said Peter Hatges, Partner, KPMG and Canadian Automotive Head, KPMG Corporate Finance. "This continued uncertainty over e-mobility technologies, along with rapid urbanization and evolving consumer behaviour are driving forces behind the expected shift in the automotive landscape over the next five years."

KPMG's Global Automotive report, Managing a Multidimensional Business Model, found:

• Over half of respondents say ICE optimization will offer the greatest potential for clean, efficient engines for the next 6 to 10 years
• Investment in plug-in technology is an area of interest for 24 percent of Original Equipment Manufacturers (OEM) and supplier respondents; only eight percent will invest in pure battery technologies
• Ninety-two percent of survey respondents consider fuel efficiency the primary vehicle purchasing factor, while environmental concerns fell from second to fourth place from 2012
• Over two-thirds of respondents envision new alternative solutions to single vehicle ownership

"Increased daily congestion and skyrocketing parking costs in Canada's urban hubs are giving rise to alternative mobility solutions such as vehicle-sharing or pay-per-use," said Hatges. "Where automakers could formerly concentrate exclusively on producing ICE cars, they must now address consumer trends such as this shift towards mobility-as-a-service, while considering a range of new propulsion technologies."

Automakers and suppliers alike must continue to consider a host of factors as they look to make the right investment decisions to fund a profitable future. As the industry adjusts to the changing landscape, some automakers are expected to fare better than others. Respondents anticipate Volkswagen will see the greatest increase in global market share, followed by BMW and Chinese manufacturer BAIC, with Toyota close behind. Ford finds itself just above General Motors, slipping from 8^th to 14^th in this ranking from the KPMG 2012 Global Automotive Survey.

The annual Global Automotive Executive Survey interviewed 200 auto executives including automakers, suppliers, dealers, financial service providers, rental companies and mobility service providers from 31 countries. Twenty-four percent of respondents are from the Americas. KPMG has released an annual survey of automotive executives expressing their views on the state of the industry since 1999.

About KPMG

KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG member firms around the world have 152,000 professionals, in 156 countries.

The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.

Follow @KPMG_Canada on Twitter and linkedin.com/company/kpmg-canada on LinkedIn for more facts from the Global Automotive Executive Survey.

SOURCE: KPMG LLP

For further information:

Kira Froese
National Coordinator, Media Relations
KPMG in Canada
[phone]
[email protected]