Johannesburg - Vehicle sales growth in emerging markets was the number one key trend up to 2025 identified by automotive executives in the latest KPMG global automotive executive survey.
Global vehicle sales were expected to pass “the magical” 100 million mark within the next two years and continue to increase until the end of this decade on the back of rising demand in emerging markets like China.
KPMG said that the majority of automotive executives clung to the expectation of growth of small and basic vehicles, so-called budget cars, based on a historical preference for such vehicles in developing markets.
However, KPMG said small and basic cars were not predicted to increase their market share, which was set to remain at just 6 percent.
WHERE THE VOLUME WILL BE
It said the compact sized, pick-up and special utility vehicles (SUVs) and sports segments were forecast to outpace overall market growth rates up to 2020, with compact-sized vehicles the real success story.
“Almost one-third of all vehicles sold worldwide are expected to come from this segment in 2020.
“This puts the spotlight on recent efforts by global OEMs (original equipment manufacturers) to invest in small budget cars in the Brics (Brazil, Russia, India and China) and other high-growth territories, with a question mark hanging over the long-term sales volume and margin potential for this segment,” KPMG said.
The top three trends identified in the survey by automotive executives were market growth in emerging markets, downsizing and optimisation of the internal combustion engine and increasing use of platforms and standardisation of modules.
The rationalisation of production in Europe and the shifting of production to emerging markets was the fourth most important key trend. Gavin Maile, KPMG automotive sector head, said yesterday that the recent decline in global fuel prices had occurred after the survey interviews, therefore the positive impact was not considered in these results.
MARKET SHARE
The survey report said traditional premium and mass market original equipment vehicle manufacturers were expected to continue their dominance of the automotive landscape over the next decade but should prepare for a more disruptive future.
Automotive executives were most optimistic the Hyundai group, which also owns Kia, would increase its global market share in the next five years despite forecasts it would remain in fifth place until 2020.
Volkswagen was considered to have far greater potential than its closest competitors, Toyota and General Motors, and predicted to take over Toyota’s crown as the number one mass market OEM from 2016 onwards.
Chery was rated as having the best chance of the Chinese OEMs of increasing market share up to 2020.
Tata, the emerging India-based OEM, was also rated very positively.
Business Report