Automotive industry executives believe that fuel efficiency is set to dominate consumer purchasing criteria, according to the latest annual global automotive industry survey from KPMG.
The survey of 150 senior automotive executives around the world found that high oil prices are driving consumers towards more fuel efficient vehicles, including hybrids. 89% of executives believe that fuel efficiency is the primary consumer preference when purchasing a new car while 88% noted quality. Safety followed third with 76%. This is a reversal from last year when 87% of executives said quality was the leading factor, 84% said fuel efficiency, and 80% named safety. This rise in the importance of fuel efficiency is more noticeable when compared with 2002, when just 58% of executives cited fuel efficiency as extremely important.
Hybrid vehicles are thought to be among the biggest winners in global markets over the next five years. In the US, more than two-thirds of executives believe that hybrids will take off, with the market reaching between 300,000 and 500,000 cars a year, compared to 200,000 sold in 2006. “Hybrids, it would seem, are poised to achieve critical mass,” said the survey report.
North American and Asian executives were generally more receptive to hybrids than Europeans, for whom diesel is a major competitor. In Asia the hybrid is already seens as the alternative to petrol, whereas in the US a debate is raging as to whether hybrids or diesel will win out. Europeans do see growth in hybrids in Europe, but from a very low base.
Executives were asked for the first time about the importance of ‘environmental-friendliness’ as a purchasing criteria. Nearly one in two executives thinks that ‘environmental friendliness’ will be an important or extremely important purchase decision over the next five years. “Environmental concerns are coming through as increasingly important from both consumers and manufacturers,” said Mike Steventon, head of automotive at KPMG in an interview.
There is already strong evidence that it is environmental concerns that are stymieing the market for SUVs. Sales of SUVs are falling around the globe. Steventon said, “issues, which were once thought of as purely European concerns, have now been elevated to a global level with even the US market finally succumbing.
This is particularly important in the US where the sector has been a key profit generator.