KPMG "Vehicle Demand Will Increase After COVID-19"

KPMG Publishes '2020 Global Automotive Industry Trends Report'
Increased Personal Safety Concerns Due to COVID-19, Demand Also Rose During SARS Outbreak

[Asia Economy Reporter Minji Lee] As interest in personal safety increases due to the novel coronavirus infection (COVID-19), there is a prospect that demand for vehicle ownership may increase.

According to the '2020 KPMG Global Automotive Industry Trends Report' published on the 16th, 47% of consumers want to own a car over the next five years, which is significantly higher than the 34% who do not. This means that consumers, who avoid interpersonal contact on public transportation due to COVID-19, have increased their willingness to own vehicles to secure personal safety.

This report, now in its 21st edition this year, surveyed 1,100 global automotive industry executives and more than 2,000 consumers across 30 countries. More than half of the executive respondents are CEOs or corporate executives.

Manufacturers based in China are experiencing the economic impact of COVID-19 more quickly than those based in the US and Europe. The report noted that in China, demand for both low-priced and high-priced vehicles increased due to the COVID-19 pandemic, showing a similar pattern to the 2003 SARS outbreak.

The report also forecasts that global vehicle production and sales trends will enter a recovery phase in the third quarter of 2020, and explains that manufacturers need to actively secure demand by strengthening customer relationships and marketing.

After COVID-19, the regionalization of the automotive industry is accelerating. According to the KPMG report, 83% of executive respondents expect industrial policies and regulations to influence the automotive technology agenda. Accordingly, regionalization is predicted to accelerate further depending on each country's policies such as subsidies and tax reductions.

Furthermore, survey results showed that internal combustion engine vehicles (ICE) are expected to have the lowest market share in 10 years. Respondents predicted that battery electric vehicles (BEV) will have the highest market share between 2030 and 2040 at 29%, followed by plug-in hybrid electric vehicles (PHEV) at 25%, fuel cell electric vehicles (FCEV) at 24%, and internal combustion engine vehicles (ICE) at 22%.

Additionally, 39% of consumer respondents expected the commercialization of fully autonomous vehicles within 10 years, and among those planning to purchase a car within the next five years, the most popular choice was hybrid electric vehicles (34%).

Lee Dong-seok, Executive Director of Strategy Consulting at Samjong KPMG, said, “The COVID-19 pandemic will lead to a fundamental structural change in the global automotive industry,” adding, “As vehicle demand gradually increases and the trend toward regionalization strengthens, it is necessary to reconsider existing market entry and production strategies.”

This content was produced with the assistance of AI translation services.