A survey of auto industry executives by KPMG found a majority of respondents expecting to see further share decline for the Big 3 over the next five years. Asian brands are expected to be the main winners, with a majority also expecting European brands to see share gains.
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In November, KPMG LLP interviewed 103 automotive executives with respect to the economy and technology and the outlook for the next five years. Some 51% of respondents see market share decline (22% see an increase) for North American brands over the next five years; 74% see increase (9% decrease) for Asian brands and 51% an increase (13% decrease) for European brands.
Brian Ambrose, national industry director of KPMG’s Automotive practice, commented: “It’s not surprising to see executives cite a decline, but the extent of it is troubling. Clearly, the next five years are going to be the most competitive the industry has seen in a long time.
“For American manufacturers, new product introductions and the technology boom offer an opportunity to end the slide in market share. The demand for quotas has given way to strong global competition. The current phase is all about market advantage through exciting new products that are affordable. It will be interesting five years from now to look back and see who seized the opportunities that exist today.”
Amongst the other findings is the widely held view (63%) that that the use of sales incentives for car buyers would increase over the next five years.
Also, some 83% of OEMs predicted that overcapacity would either increase or remain the same over the next five years. Only 60% of Tier 1 and Tier 2 suppliers predicted that overcapacity would either increase or remain the same.
Brian Ambrose added: “This will put more pressure on the vehicle manufacturers who will be forced to cover the high overhead costs in keeping their plants running. Increasing sales masks many inefficiencies within the industry. If sales decrease in the next two years, capacity will have to be reduced either through plant closings or consolidation.”
