China set to dominate in battery electric vehicles and car-sharing
China is leading the development of new business models and innovations, including battery electric vehicles (BEVs) and car-sharing, finds a recent KPMG survey.
KPMG’s 19th Global Automotive Executive Survey featured insights from a survey of 900 executives in the automobile and technology industry (including 135 from China), and around 2,100 consumers globally (including 251 from China).
A large number of auto executives highlighted China as their top pick for launching new mobility services and data-driven business models. Around one-fifth of global executives identified China as the number one country to launch new products/cars and new mobility services, up from 16 percent and 15 percent in 2017, respectively. Meanwhile, 15 percent of respondents said China is the place to implement new data-driven business models, up from 13 percent last year. US and Germany are also key destinations for pilot launches.
Huu-Hoi Tran, Partner and Head of Automotive China, KPMG China, says: “Growing mobility needs, insufficient public transportation and a wider acceptance on shared economy are driving innovation in intelligent mobility, new energy vehicles (NEVs) and autonomous driving. This is further boosted by central as well as local government support, which creates an attractive market for OEMs, startups and tech players.”
In addition, the survey finds that original equipment manufacturers (OEMs) from China are closing in on their competition in innovative technologies. Two OEMs from China, for example, were among the top 10 picks for survey respondents, when asked which manufacturers would be leaders in electric mobility and autonomous driving technology by 2025. A favourable infrastructure and regulatory regime in China is highlighted as a key growth driver, according to the survey.
In terms of areas with the largest potential, the survey highlighted a big difference in perception between Chinese and global respondents.
Global executives indicated China is likely to become a market leader in product-driven innovations, such as BEVs (35 percent) and fuel cell electric vehicles (25 percent). Chinese executives, on the other hand, indicated China’s strength in service-driven and business model innovations such as car-sharing (39 percent).
Tran says: “Urbanisation, traffic congestion and the slow development of public transportation in some cities in China require innovative mobility solutions. Car-pooling, sharing and hailing services, for example, are already widely accepted and we expect to see even more innovation, given the pace of digitalisation in China.”
Globally, auto executives identified fuel cell electric mobility as a key manufacturing trend, replacing battery electric mobility from last year’s survey. In China, executives continue to highlight connectivity & digitalisation as a key priority, followed by the increased adoption of big data analytics to create value.
Tran concludes: “China will maintain its fast pace in NEV development, while internet+ vehicles and intelligent mobility will also be key priorities. We expect Chinese players to achieve significant breakthroughs in these areas this year.”
– Ends –
In this year’s survey we asked a total of 3,000 respondents our questions, of whom 900 are automotive executives – more than half are C-level executives or CEOs, Presidents or Chairpeople. Around one third of the respondents are based in Western and Eastern Europe, while 15 percent come from China and also each 13 percent from North and South America. 16 percent of the executives are located in India & ASEAN and 12 percent in Mature Asia.
The respondents represent companies of all parts of the automotive value chain including vehicle manufacturers, Tier 1, 2 and 3 suppliers, dealers, financial services providers, mobility service providers and for the first time also ICT companies. More than 70 percent of all participants act in companies with annual revenues greater than USD1 billion, of whom almost 70 percent even have revenues of more than USD 10 billion. The survey was conducted online and took place between July and November 2017.
Also, 2,100 customers from around the world, all ages and educational backgrounds were interviewed to give us insights and their valuable perspectives and opinions.
All the survey data is now available at kpmg.com/GAES2018 in an interactive online tool where users can compare statistics by country, region, question asked and more.
KPMG China operates in 16 cities across China, with around 12,000 partners and staff in Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 154 countries and territories and have 200,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies.