Auto technology has industry execs bracing for disruption
Automotive senior executives believe software and digital technology will be the lead factor driving competition between global automakers in the next decade.
Those are among the findings of KPMG International’s 26th Global Automotive Executive Survey. According to its results, 51% of executives polled see that the battle for sales will be dictated by offerings in software defined vehicles by 2035.
The survey of 775 senior executives worldwide also found 48% of respondents expect six of the world’s top 10 automakers will be headquartered in China by the middle of the next decade, according to the press release.
This shift suggests auto executives could be bracing themselves for major disruption through technology, geopolitics, sustainability, operating pressures, customer expectations and business models, according to KPMG.
But it also reflects a transformation 52% of surveyed executives are currently feeling: that the industry is moving from a time-limited industry production process to one where continuous transformation is the norm.
“The companies that move fastest to translate technology into customer value, while retaining the flexibility to respond across markets, will be best placed to lead the next phase of the industry,” Andreas Ries, KPMG’s global head of automotive, said in the press release.
The technology driver
Executives also see future competitive differentiation in adoption of AI, software-defined vehicles, advanced driver-assistance systems, intelligent cockpits and connected services.
The report documents that industry transformation occurs at different speeds according to the region. For instance, 57% of the executives surveyed in the Asia-Pacific region reported significant investment in AI and emerging technologies, compared with 52% in Europe and 48% in the Americas.
Independent of the region, though, 92% of executives said it takes at least a year to deploy a digital, software or AI capability enterprise-wide, while more than 33% said deployment takes over two years.
There’s also a recognition among auto executives that ecosystems and technology investments will define future competitiveness.
The share of value creation enabled by external partnerships and ecosystems is expected to rise from 30% today to 44% within three years, according to KPMG. Meanwhile, half of the survey’s respondents believed trust in digital and connected features will significantly influence which companies win or lose over the next three years.