DETROIT -- Automotive executives worldwide strongly agree that high oil prices have permanently changed consumers' purchasing habits globally, driving them toward more fuel-efficient vehicles, including hybrids, according to an annual global survey of industry leaders by KPMG LLP, the U.S. audit, tax and advisory firm.
The KPMG survey, based on interviews with 150 senior executives at vehicle manufacturers and suppliers worldwide, found that executives continue to believe that fuel efficiency and quality are the primary consumer preferences when purchasing [image-nocss] a new car, 89% and 88% respectively. Last year, 87% of executives said quality was the leading factor, and 84% said it was fuel efficiency.
High gas prices, which are permanently etched on consumers' minds, have had dramatic implications for auto manufacturers who lack quality, fuel-efficient products to satisfy demand, said Daron Gifford, national automotive industry leader at KPMG.
For the second consecutive year, industry executives said they believe the most popular vehicles over the next five years will be hybrids, cited by 83% of respondents, and low-cost cars, according to 64% of respondents. Last year, 88% of executives said hybrids would be the most popular, while 79% cited cars.
Overall, 64% of executives said they expect cars to increase global market share over the next five years, outpacing larger vehicles, such as minivans, which were cited as a growth model by only 33% of executives. Meanwhile, just 28% said SUVs would be gaining share; 55% of executives also expect market share for crossovers to increase, while 42% predicted market share for luxury vehicles will increase.
Gasoline prices have shifted the model mix in executives' minds, and future winners in the global automotive marketplace will have to find ways to combine ingenious cost-efficiencies with startling design creativity, said Gifford.
In breaking the categories down into a regional view:
95% of North American executives said they were more likely to see a rise in hybrid sales over the next five years, while 67% of North American executives predicted crossovers. 89% of European executives were optimistic on the sale of low-cost vehicles, and 57% forecasted luxury vehicles sales will increase. 37% of Asian executives are more confident about the sales of large pickup trucks, while 72% expected car sales to rise.This year, 71% of executives believe hybrids will become a U.S. market force, with between 200,000 and 500,000 cars being sold compared with 200,000 sold in 2006.
The hybrid mantra is that the breed cannot fail, given consumer demand and its relatively minuscule production numbers, said Gifford.
Additional findings include:
90% of executives believe consumers will hold on to their new cars for three to seven years. 94% of executives consider product quality as the most important industry issue in 2006, while 89% named cost reduction. 66% of executives cited innovations in manufacturing as the greatest source of cost savings for vehicle manufacturers, followed by materials innovation and outsourcing to countries like China and Eastern Europe according to 61% of executives respectively. 48% of executives named new models and 43% said new technologies are the areas where manufacturers will increase investment.In the KPMG survey, the executives interviewed represented vehicle manufacturers and suppliers in Canada, United States, England, France, Germany, Sweden, India, China, South Korea, Japan and Australia. KPMG has released an annual survey of automotive executives expressing their views on the state of the industry since 1999.
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