Small cars to fuel future demand: KPMG

Sales potential of the basic and small car segment is set to accelerate over the next five years, according to the KPMG Global Automotive Executive Survey.

The survey, now in its sixteenth year, also found out that for the next five years, respondents see consumers still fixated on traditional product issues that will drive their purchasing decisions.

In the last two years, the industry saw fuel efficiency as the most important consideration by consumers when buying a car, followed by enhanced vehicle lifespan, safety innovation and ergonomics/comfort.

Concerns over vehicle quality have risen, following several high-profile product recalls, with more and more customers now seeking vehicles with longer lifespans.

The use of alternative fuel technologies remains a low priority, suggesting strongly that the consumer purchase decision is driven more by the wallet than the conscience.

Meanwhile, innovations in technology-enabled connectivity between the driver, car and its environment rank in the bottom four of 10 vehicle features that respondents think consumers will desire between now and 2020.

Dieter Becker, KPMG’s Global Head of Automotive said, “The automotive sector is feeling pressure from two sides: on the one side increasingly strict regulatory standards all over the world demand a strong focus on the optimisation of traditional powertrain technologies and heavy investments into alternative drive trains."

Indians too consider fuel efficiency and safety innovations as the most important consumer considerations while purchasing a car. The survey re-emphasises the point that quality service experience during the purchase transaction is extremely important to Indian consumers.

According to the survey report, Indian companies will be investing in two powertrain technologies over the next five years: 33% in downsizing and optimisation of internal combustion engines and 27% in fuel cell electrical vehicles.