Friday, January 11, 2008

KPMG Reports Auto Industry Focusing On Green Tech

By Anthony Fontanelle

According to a study conducted by KPMG, an American audit, tax, and advisory firm, the auto industry is focusing on the development of green technology like finding alternative fuel sources. The industry is also set towards the development of low-cost cars and hybrid vehicles which consumers are asking for.

The poll conducted by KPMG included 113 senior executives of automakers and suppliers around the world. According to the survey, 86 percent of the executives believe that consumers will be looking at the quality of a vehicle that they will purchase in the next five years. Close behind, 84 percent of the polled executives said that fuel efficiency will be the main basis that consumers will be considering in their next vehicle purchase.

Seventy percent of the polled respondents believe that safety will be the main concern of auto buyers. Sixty nine percent of the executives also pointed out that affordability will be one of the main factors to be considered by auto buyers the next time that they visit their local dealerships to buy a new vehicle.

"The industry knows where it is and knows where it needs to be," said Daron Gifford, the National Automotive Leader for KPMG LLP. "It needs to produce quality vehicles that are fuel efficient, especially in this economic cycle, and it needs to invest heavily in developing alternative sources of power. We found the execs in our survey more optimistic than past years, and that's largely because the landscape before them is clearer on the direction they need to go."

As the shift in car buying trend continues, the poll asked the executives which auto class will show improvement or decline. 83 percent of the surveyed executives said that they are expecting sales of low-cost cars to increase. The same percentage also predicted that hybrid sales will still increase. Meanwhile, 67 percent of them are saying that car sales will increase in the next five years. Also, 58 percent of the questioned executives said that there will be an increase in the number of crossover that will be sold in the foreseeable future.

As consumers shy away from large vehicles due to the increasing price of petroleum fuel, 47 percent of the respondents said that they are expecting sales decrease for SUVs. 50 percent of the executives also said that sales of pickup tricks will slow down. This tough will unlikely affect the supply and demand for car accessories such as Acura bug shields.

"The auto execs expect heavy investment in new models/products and new technologies in the next two years as well as building capacity in Asia," said KPMG's Gifford. "Not investing puts manufacturers at risk in terms of market and product differentiation, resulting in market share decline."

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