EASTERN Cape automotive sector roleplayers have their work cut out for them as the latest global survey has revealed a number of challenges affecting the industry.
However, with these challenges – including changing customer needs, urbanisation, globalisation and struggling economies – came various opportunities, Nelson Mandela Bay KPMG managing partner Alan Barr said.
KPMG presented its 12th global automotive survey, which highlighted global trends, to provincial role-players at the Boardwalk's new convention centre in Port Elizabeth yesterday.
More than 200 senior executives from automakers, suppliers, dealers, financial service providers, rental companies and mobility service providers from 31 countries were interviewed for the survey.
One of the major trends globally and in South Africa was consumers' interest in fuel efficiency.
As rising fuel costs and economic pressure plague the consumer, fuel efficiency has become the primary factor in the selection of a vehicle.
For 92% of respondents this factor trumped any other.
Industry insiders see this as an opportunity, with more than 29% of original equipment manufacturers and supplier executives saying they would invest in optimising internal combustion engine technology.
More than half of respondents believed this approach would offer the greatest potential to create clean, efficient engines for the next six to 10 years.
Environmental concerns such as reducing CO² emissions were also still important, but slipped from second place in last year's survey to fourth this year.
"Many manufacturers have already made significant advances in reducing emissions and increasing power. Future reduction in emission targets and increases in fuel prices will result in new technology becoming more prevalent," KPMG Africa automotive head Gavin Maile said.
The survey indicated investment in plug-in hybrid technology also presented an opportunity for the sector, with 24% of original equipment manufacturers and suppliers naming this as a key focus area, although only 8% of them expected to invest in "pure" battery technology.
"Interest in battery technology is definitely fading a bit," KPMG industry research manager Ashleigh Raine-Botha said.
The survey suggested automotive sector role-players were switching their focus from traditional markets to emerging markets, including the Brics (Brazil, Russia, India, China and South Africa) countries.
About 60% of respondents indicated they would increase their investments in these countries, which are expected to account for nearly half of all global vehicle sales by 2018.
China was the first choice for investment, followed by India, Russia and Brazil. "South Africa has, for the first time, also been highlighted as an investment destination," Maile said.
This was a direct result of the government's commitment to retain, support and expand the existing manufacturers and component suppliers operating in South Africa through the new Automotive Production and Development Programme.
The survey suggested increasing urbanisation would spur the creation of smaller, lightweight vehicles. Raine-Botha said this would lead to a focus on lightweight materials such as carbon fibre.
More than 80% of respondents believed that within the next five years lightweight materials would be mass produced.