DETROIT, Jan. 7, 2014 (GLOBE NEWSWIRE) -- Global automakers believe in-vehicle technology will be an increasingly important purchasing factor for consumers over the next five years, and they plan to aggressively invest to keep up with consumer expectations, according to the 15th Annual Global Automotive Executive Survey, Strategies for a Fast-Evolving Market, conducted by KPMG, the audit, tax and advisory firm.
In the KPMG survey of 200 C-level global auto executives, respondents indicate that in-vehicle technology will be nearly as important as vehicle styling in consumer purchase decisions over the next five years. In fact, more than two-thirds of the executives say plug-in (69%) and vehicle-bound (66%) solutions for navigation, speech recognition and internet connectivity will be "extremely" or "very" important – up from 54% and 60% in last year's KPMG survey. This compares to 74 percent for vehicle styling. Respondents in the U.S. are even more bullish on vehicle technology, with 75% saying plug-in and 80% saying vehicle-bound technology will be critical components in the consumer purchase decision.
"OEMs are introducing technology at rapid speed, and consumers are embracing it as quickly as it comes out and are even demanding more," said Gary Silberg, national automotive industry leader for KPMG LLP. "Consumers expect to have connectivity at all times, including in their cars, whether through an embedded or unembedded device. Whereby car decisions have been based historically on price, styling and fuel economy, now consumers are equally interested in the technology aspects of the vehicle."
Silberg said that, as a result, "Automakers will continue to evolve cars into highly complex computers. The industry will need to aggressively invest in R&D and develop new partnerships that will allow them to continue to bring technology innovation to vehicles."
In fact, 41% of global auto executives surveyed indicate that their companies will increase investment in connectivity and infotainment components, as well as interfaces for third-party consumer electronics (e.g. mobile devices) over the next five years – up from 32% and 27% in last year's survey. Responses among U.S. executives are higher, with 45% predicting increased investment in these areas.
As automakers consider ways to gain technology leadership, many global executives (77%) say corporate partnerships like joint ventures and strategic alliances will be very important parts of their investment strategies. Eighty-five percent of U.S. respondents rated joint ventures and alliances as a critical component of their companies' investment strategies. Interestingly, 81% of respondents say OEMs will lose the overall expertise for the car development due to stronger involvement of suppliers.
KPMG's Silberg adds "these partnerships are not new, in fact, several OEMs have successfully collaborated with technology companies while others have struggled. Getting this right in the future will be critical, especially given the enormous technological innovation occurring in the vehicle."
In fact, when asked where OEMs are heading in the future, almost half say it is very likely that new players with no traditional presence in the auto industry (e.g. electronics companies) will become key players.
About the 15th Global Automotive Executive Survey
Strategies for a Fast-Evolving Market surveyed 200 senior executives including automaker, suppliers, dealers, financial service providers, rental companies and mobility service providers from 28 countries in July and August 2013. Forty one percent of the respondents are based across Europe, Middle East and Africa, 35 percent in the Asia Pacific region and 25 percent in the Americas. All of the participants represent companies with annual revenues greater than US$100 million, and 39 percent work for organizations with revenues of over US$10 billion. KPMG has released an annual survey of automotive executives expressing their views on the state of the industry since 1999.
About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 152,000 professionals, including more than 8,600 partners, in 156 countries.