EU CO2 rules force motoring execs to focus on optimising engines over new technology, says KPMG report

EU CO2 rules force motoring execs to focus on

Global automotive executives are prioritising near-term market issues, such as optimising engines and entering emerging markets, over investing in self-driving cars and other innovations, according to KPMG’s Global Automotive Executive Survey 2015.

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Global automotive executives are prioritising near-term market issues, such as optimising engines and entering emerging markets, over investing in self-driving cars and other innovations, according to KPMG’s Global Automotive Executive Survey 2015.

The survey revealed that since 2013, the top priorities have remained unchanged but have increased in importance:

  1. Market growth in emerging countries (2013: 43 percent; 2014: 52 percent; 2015: 56 percent)
  2. Optimisation of the internal combustion engine  (2013: 36 percent; 2014: 40 percent; 2015: 49 percent)

John Leech, UK Head of Automotive at KPMG said: “The executives involved in this year's survey have prioritised near-term market issues over longer-term technological innovations. The focus on emerging markets is understandable as three-quarters of the expected growth in new car sales is forecast to come from these markets. Here in the UK premium car manufacturers, such as Jaguar Land Rover, BMW MINI, Bentley, Rolls-Royce and Aston Martin, are all well positioned to benefit from this trend.”

“The drive to optimise the internal combustion engine is fuelled by growing environmental pressures.  In the UK, manufacturers are principally focussed on the EU CO2 rules, which set targets for vehicle manufacturers that correlate with vehicle weight.  This means that CO2 saving solutions that also add weight, such as direct injection, are favoured over light weight solutions like the use of aluminium.” 

The survey found that a commercial market for self-driving cars seems no closer, even though there have been announcements by governments and manufacturers supporting pilot self-driving cars. It found that 43 percent of auto executives in Western Europe surveyed felt it will take more than 20 years before these vehicles are commonly seen on our roads.

“Even though respondents of the survey suggest that it will take more than 20 years before self-driving cars are commonly seen on our roads, the reality is that self-driving cars are the final step on a long journey towards connectivity that has already been started.  2015 will see cars on British roads that can steer, accelerate and decelerate by themselves in slow traffic, such as the Volvo XC90. We are also seeing a number of cars with touchscreens, displaying apps allowing consumers to utilise smartphone functionality from within the car.  We believe that 2015 will be the year of the connected car in the eyes of the consumer,” said John Leech.

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Notes to Editors:

About KPMG’s Global Automotive Executive Survey 2015

Two hundred automotive executives participated in this year’s survey. The respondent interviews were conducted by phone between July and August 2014.

 

For media enquiries, please contact:

Nahidur Rahman, KPMG Press Office

T: 020 7694 8812

M: 0788191 6975

E: nahidur.rahman@kpmg.co.uk 

Ann Burton, KPMG Press Office

T: 020 7311 6497

M: 07467 339 719

E: ann.burton@kpmg.co.uk

KPMG Press office: +44 (0) 207 694 8773

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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals 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.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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