Auto Exec Survey: 50 Percent Believe Restructuring Plans Will Succeed
Building alternative fuel cars and exploring emerging markets seen as chief opportunities. Execs continue to see significant rise in bankruptcies and M&A activity.
Global automotive execs expect a significant decline in market share for United States vehicle manufacturers but continue to see U.S. OEMs becoming more efficient and competitive in the near term, according to the 10th annual global automotive survey by KPMG LLP, the U.S. audit, tax and advisory firm. Despite facing recessionary times and fighting overcapacity issues, automotive executives remain focused on manufacturing alternative fuel cars and the continued exploration of emerging markets for growth.
In the KPMG survey, based on interviews with 200 senior executives at vehicle manufacturers and suppliers worldwide, the executives, facing worldwide recessionary conditions had no read on profitability, with only 15 percent expecting profits to increase, 24 percent decline, and 46 percent indicating that profits are too volatile and unpredictable to forecast.
But in predicting market share winners over the next five years, they identified Toyota, Hyundai, Honda and Volkswagen as leaders, with General Motors, Ford and Chrysler on the low rung of market share expectations.
However, when asked if they felt U.S. OEMs were succeeding with their restructuring programs, for the second year in succession, the executives expressed that the OEMs are on a path to becoming more efficient and competitive. Fifty percent of the executives see the restructuring plans succeeding, with 43 percent neutral and six percent disagreeing. This is only somewhat lower than a year ago when 58 percent saw the OEMs succeeding and 10 percent disagreeing. And the majority, 57 percent, expect the restructuring to be completed before 2011, only somewhat down from 64 percent a year ago.
Despite market chaos, overcapacity, and declining profits, Silberg feels that the distractions of the recession "haven't taken the executives' eyes from capitalizing on new emerging market opportunities and from focusing on fuel technologies."
The KPMG survey asked the executives to identify the chief opportunities for the auto industry now and for the next three years, and 21 percent said alternative fuel cars, 19 percent the exploration of new markets, 17 percent said fuel efficient cars and 16 percent said developing new technologies.
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