KPMG: Auto Execs Eye Vulnerable Supply Chains
December 20, 2022
22nd Annual Global Automotive Executive Survey finds that 53% of executives are
confident that the industry will see more profitable growth.
Global auto executives are confident that the auto industry will see more
profitable growth in the next five years and that the market share of electric
vehicles will grow dramatically by 2030, according to a new survey by KPMG. At
the same time, supply chain issues and labor shortages are of great concern.
KPMG’s 22nd Annual Global Automotive Executive Survey
of 1118 executives across automotive and adjacent industries found
that 53% are confident that the industry will see more profitable growth,
compared to just 38% who are concerned about profit prospects. The survey, which
included 372 CEOs, found that executives’ confidence extends to other areas as
well, including the industry’s ability to withstand the next great disruption.
“It’s encouraging to see such widespread optimism about the growth prospects for
the auto industry,” said Gary Silberg, Global Head of Automotive at KPMG. “Car
manufacturers have rarely faced such an array of technological and
business-model changes since the dawn of the automotive industry 130 years ago.
Flying taxis, cars by subscription, ubiquitous and fast EV charging stations,
big-tech car entrants — these are some of the developments we can expect in the
next 10 years.”
Vulnerable supply chains and labor shortages
The news, however, is not all rosy. Executives are worried about a range of
issues affecting the supply chain, including the price and availability of
semiconductors, steel, rare earth elements and other scarce materials. Over 50%
of respondents were “extremely” or “very worried” about the supply of these
materials. Furthermore, 55% of executives are very or extremely concerned about
“There are urgent questions executives need to answer right now: Have they
learned recent lessons to build more resilient supply chains and address labor
shortages?”, Silberg said. “Auto manufacturers are competing for talent not only
among themselves but also against other industries. We will likely see
executives taking lots of time in the coming years to problem solve these
EVs on the rise
Executives expect the market share of EVs to grow dramatically, though there is
no consensus about what market share it will capture.
EVs’ popularity may depend partly on significant investments in DC fast-charging
infrastructure; 77% of executives expect consumers to require charge times under
30 minutes when traveling. Most charging stations in service today take more
than three hours.
The survey also found that expectations for the EV market are based on when EVs
will reach cost parity with internal combustion engines. Most believe EVs can be
widely adopted without government subsidies (77%), but the majority still
support such programs (91%).
The rise of new entrants and the shift to digital
technology and automotive industries are converging, leading to new alliances
and new entrants. Start-ups are raising billions, and executives believe tech
companies will enter the market.
Furthermore, 78% of executives agree that there will be a fundamental change in
how vehicles are purchased in the coming years, saying that most will be sold
online by 2030. And about three-quarters predict that more than 40% of vehicles
will be sold directly by automakers to consumers, bypassing dealers.
With the move to digital commerce, executives expect that automakers will
monetize the vast amount of data they will collect; 43% expect that automakers
will sell data to auto insurance companies.
About the survey
KPMG conducted a global survey of 1,118 executives across automotive and
adjacent industries in August 2021, including 372 CEOs, 325 other C-level
executives, heads of business units and departments and managers. About a
quarter (24%) work for car manufacturers, and 13% for Tier-1 suppliers. Truck
manufacturers employ 11% of respondents. Companies with annual revenues of more
than $10 billion in 2020 employ 27% of respondents, while 35% have annual
revenues between $1 billion and $10 billion and 38% have revenues less than $1