As reported by KPMG
TORONTO, - Senior global automotive industry executives see their industry stabilizing over the next 5 years, with growth and new investment on the horizon, according to KPMG's Global Auto Executive Survey 2010.
However, the survey indicates that there are still challenges to be faced as companies in the sector emerge from a severe economic downturn few had anticipated.
The 200 senior executives representing vehicle manufacturers and suppliers worldwide say they still face ongoing challenges, including high unemployment rates, particularly in the US, better but still constrained credit markets, and a lack of clarity with regard to the impact of new government regulations and stimulus programs. Accordingly, executives still see profitability as a significant issue this year; although, over one-quarter of them expect vehicle manufacturer profits to increase, while 42 percent expect profits to be stable and 36 percent expect a decline.
Of the 200 respondents, 30 percent were based in the Americas. Of those, 28 percent were based in the United States, 15 percent were based in Canada, 10 percent were based in Mexico, and 7 percent were based in Brazil.
Nearly three-quarters of survey respondents believe the number of alliances, mergers, and acquisitions during the next 5 years will increase for vehicle manufacturers. Substantial majorities also think they will increase for tier-one suppliers (just over 70 percent), tier-two suppliers (56 percent), and dealers (52 percent). These numbers are consistent with last year's results.
"Distress M&A transactions in the auto sector have been prevalent over the past year and are seen by the survey respondents to continue through 2010 as debt levels and profitability remain an issue for many," said Dawdy. According to the survey, the specific global drivers of alliances, mergers, and acquisitions include too much debt and risk of bankruptcy (89 percent), access to new technologies and products (84 percent), potential for product synergies (83 percent), and access to new markets and customers (82 percent).
When asked about the most important issues affecting the global auto industry over the next 12 months, 85 percent of the respondents said developing new technologies, while 84 percent pointed to developing new products, and another 80 percent said reducing costs.
TORONTO, - Senior global automotive industry executives see their industry stabilizing over the next 5 years, with growth and new investment on the horizon, according to KPMG's Global Auto Executive Survey 2010.
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However, the survey indicates that there are still challenges to be faced as companies in the sector emerge from a severe economic downturn few had anticipated.
The 200 senior executives representing vehicle manufacturers and suppliers worldwide say they still face ongoing challenges, including high unemployment rates, particularly in the US, better but still constrained credit markets, and a lack of clarity with regard to the impact of new government regulations and stimulus programs. Accordingly, executives still see profitability as a significant issue this year; although, over one-quarter of them expect vehicle manufacturer profits to increase, while 42 percent expect profits to be stable and 36 percent expect a decline.
Of the 200 respondents, 30 percent were based in the Americas. Of those, 28 percent were based in the United States, 15 percent were based in Canada, 10 percent were based in Mexico, and 7 percent were based in Brazil.
Nearly three-quarters of survey respondents believe the number of alliances, mergers, and acquisitions during the next 5 years will increase for vehicle manufacturers. Substantial majorities also think they will increase for tier-one suppliers (just over 70 percent), tier-two suppliers (56 percent), and dealers (52 percent). These numbers are consistent with last year's results.
"Distress M&A transactions in the auto sector have been prevalent over the past year and are seen by the survey respondents to continue through 2010 as debt levels and profitability remain an issue for many," said Dawdy. According to the survey, the specific global drivers of alliances, mergers, and acquisitions include too much debt and risk of bankruptcy (89 percent), access to new technologies and products (84 percent), potential for product synergies (83 percent), and access to new markets and customers (82 percent).
When asked about the most important issues affecting the global auto industry over the next 12 months, 85 percent of the respondents said developing new technologies, while 84 percent pointed to developing new products, and another 80 percent said reducing costs.
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