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January 11, 2016

Tech taking over at ‘motor’ shows – KPMG survey

In case anyone hadn’t noticed, last week’s Consumer Electronics Show in Las Vegas appeared to have been taken over by auto companies – the LA show was all about connected cars and the NIAIS in Detroit this week is going the same way.

In case anyone hadn't noticed, last week's Consumer Electronics Show in Las Vegas appeared to have been taken over by auto companies – the LA show was all about connected cars and the NIAIS in Detroit this week is going the same way.

Now it's official – auto industry executives agree: connectivity and digitalisation is the number one most important trend that will hold through to 2025.

According to the 17th annual KPMG International Global Automotive Executive Survey this is a significant jump from its ranking 10th last year.

This year, 800 executives from 38 countries gave their insights to KPMG on topics such as business model disruptions, connectivity and digitalisation, customer data, new products and who will be the winners or losers in this industry undergoing massive change. To give further insights and 'reality checks' to the industry, KPMG also surveyed over 2100 customers from around the world. 

According to KPMG's GAES major business model, disruption is extremely likely for around 10 times more of the auto executives surveyed this year compared to last year – 82% of the auto executives surveyed estimate a major business model disruption in the next five years to be extremely likely or somewhat likely.

Dieter Becker, KPMG's global head of automotive, said: "Nothing will stay as it is in the automotive industry. Ever-changing service and data-driven business models should be paving the way towards owning, securing and keeping the key stakeholder – the customer. In order to meet their current needs, becoming a customer-oriented service provider is of utmost importance. One way traditional car makers can add value and offer customised client experiences is by leveraging the massive amounts of data that both the car and its driver(s) produce."

However, according to the KPMG report, the majority of auto executives say the use of data and the application of informational engineering is still at the very beginning stages. Around 70% of the auto executives state that data use is in an early stage some even state that there is no usage at all. 

Almost one third of the executives surveyed believe that car buyers trust OEMs the most as the 'owner' of the data generated from their vehicle. However, 54% of the over 2100 customers surveyed say that they trust only themselves with the data generated in their car. 

Auto executives place high importance across all benefits they would offer to customers for their data; which suggests they are unsure of where to place their bets. Different from customers, auto executives place monetary benefits (82%) behind equal figures for individualised service and customer experience over the whole customer lifecycle and 'customer incentive schemes' (88% for both). 

Executives responding to this year's survey reckon Toyota will have the largest market share among OEMs in the next five years (58%). Toyota has made the biggest leap ahead among OEMs – moving from ninth place last year to first this year. Yet the competition is with respondents placing BMW and Volkswagen just one to two points behind.

BMW and Toyota will also be the leaders in the fields of e-mobility and autonomous driving. They are also ranked in the top spots as being the most ground-breaking innovators in the future followed by Honda, Ford and Tesla. 

Becker said: "Some may ask how it is possible that two traditional players are occupying the first two ranks in fields of electro mobility, ahead of Tesla, the former master of e-mobility? The results are not surprising, as especially BMW has established a strong e-mobility brand with their i8 and i3 models, which are leading the way for electric cars. Toyota is currently building up a new future oriented and innovative image with the fuel cell model Mirai to which customers and media had a positive reaction. However, although fully electric vehicles like the Tesla Model S/X have got a lot of attention over the last year, the total amount of fully electric vehicles and their applicability for daily use is still far away from the mainstream needs of today's customers."

More than one third of all respondents expect traditional auto companies to be the ground-breaking innovators within the industry and among new market entrants in the next five years. They are followed directly by ICT companies in second place with 30% – predominantly Google and Apple. Other players, including mobile payment providers, new financial services providers and start-ups, are only seen by few executives as the overall future innovators.

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