Owning a car will be a thing of the past in less than a decade

Owning a car thing of the past in less than a decade

UK automotive executives expect that more than half of today’s car owners will not want to own a car in less than a decade, according to KPMG’s Global Automotive Executive Survey 2017.

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The survey found that 74 per cent of UK automotive executives think that by 2025, more than half of car owners today will not want to own a vehicle, as self-driving technology and mobility as a service will take priority.

John Leech, UK Head of Automotive at KPMG, said: “The UK is particularly suited to the early adoption of self-driving cars consumed as a service. Our greenbelt policy has created a relatively dense urban population which, when coupled with our high fuel prices, means that so-called “robot taxis” offer a greater cost saving to the UK public, compared to European or North American markets.  I believe robot taxis will revolutionise UK urban transportation in the second half of the next decade.”

The report findings revealed that 62 per cent of UK automotive executives view diesel technology as a thing of the past, expecting the traditional powertrain technology to eventually vanish from the manufacturers’ portfolio. Meanwhile, a staggering 93 per cent of UK automotive executives are planning to invest in the technology for battery electric vehicles over the next five years.

For the first time, battery electric vehicle technology has overtaken connectivity and digitalisation as the key trend in this year’s survey. The report revealed that 90 per cent of UK automotive executives expect battery electric vehicles to dominate the automotive marketplace by 2025.

“Improvements in the cost and range of battery technology, coupled with growing concern over the emission of both carbon dioxide and nitrogen oxides from diesel engines, means that almost the whole automotive industry believes that the mass adoption of electric cars will happen during the next decade,” said Leech.

With consumers shifting to using cars but not owning them, it’s likely there will be fewer cars and therefore less money to be made from building vehicles in the future. This does not worry the majority of automotive executives: 85 per cent of the respondents said they are convinced that their company will generate higher revenues by providing new digital services, than selling cars alone.

“Carmakers plan to sell a myriad of new digital services to vehicle users. Today carmakers already make substantial profits from the sale of consumer finance and annual vehicle insurance but this will grow in the future as innovative services such as remote vehicle monitoring and the integration of the car as a focal point in people’s ever more connected lifestyles are demanded by consumers.

“For the auto industry this implies that pure product profitability is outdated. Carmakers’ success will not be evaluated solely on the quantity of vehicles sold, but on the customer value over the whole lifecycle - especially when the digital ecosystem will be ready for the market. 

“So OEMs need to rethink. More than three out of four executives believe that one connected car can generate higher revenues over the entire lifecycle than 10 non-connected cars.” concluded Leech.

Ends

Notes to editors

Further questions discussed in KPMG’s Global Automotive Executive Survey 2017:

  • Who owns the valuable customer and vehicle data generated in a connected vehicle? Whom do customers trust with their data and what compensation do they expect?
  • How will the new market entrants from Silicon Valley change the automotive industry? Can the existing tie between the customer and the traditional carmaker hold?
  • Will Europe really lose ground, as 65 percent of executives predict less than 5 percent of global production in 2030 to take place in Western Europe? Will China continue its triumph on the long run and even become leading in innovation? India is said to replace China on the pole position – is this realistic?

This is how KPMG’s Global Executive Survey came into existence in its 18th consecutive year

Almost 1000 senior executives working for vehicle manufacturers, suppliers, dealers, financial and mobility service providers as well as ICT companies gave us their valuable insights on the topics and trends the industry is facing today and even more in the future. As the customer is in the center of a connected world, an additional 2400 consumers were asked in order to directly compare their opinion to the executives’ perspective.

Individualisation is key – also for KPMG International’s Automotive practice 

This is why we invite you to visit our interactive dashboard including all results directly via your browser. Starting 3 January 2017, you will find every analysis conducted in the survey at www.kpmg.com/GAES2017, equipped with individual filter options for regions, countries, target groups, and many more. There is no registration required.

About the KPMG International’s Global Automotive Executive Survey 2017

For this year's survey we have asked more executives and covered a wider range of countries than at any time in the past. Half of our 953 respondents are CEOs, Presidents, Chairmen or C-level executives, providing us with even more reliable results about the opinions in the core of the automotive industry.

Our sample is split evenly between the upstream (product-driven) and the downstream (service-driven) market, with a stronger focus on ICT companies than in the previous years. Thereby we account for the latest developments in the market and keep track of the new players who challenge the industry.

Around one third of the executives are based in Western & Eastern Europe, 13 per cent each come from North and South America and 15 percent originate from India & ASEAN. 9 percent of the executives come from China, 10 percent from the Mature Asia region with Japan and South Korea. Almost two thirds of our respondents act in companies with a revenue greater than US$1 billion, half of whom even have revenues of more than US$10 billion.

The survey was conducted online and took place between September and October 2016.

For media enquiries please contact:

Jo Chileshe, KPMG Corporate Communications

T: 0121 232 3343

M: 07919 211 803

E: jo.chileshe@kpmg.co.uk

Nahidur Rahman, Senior PR Manager

T: +44 (0) 20 7694 8812

M: +44 (0)73 9376 0775

E: nahidur.rahman@kpmg.co.uk

Follow us on twitter: @kpmguk

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff.  The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 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. 

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