Four Out of Ten Automotive Executives Expect Business Transformation Within Three Years

KPMG Releases Results of "Global Automotive Executive Survey"
42% of "Leading Companies" Cite Technological Innovation as Key Growth Driver
86% Investing in AI, But Only 20% Ready for Real-World Application

Four out of ten executives in the global automotive industry expect large-scale changes in business models and operations within the next three years. Two out of three believe that industry consolidation will be inevitable due to slowing global demand.

On October 20, global accounting and consulting firm KPMG released the results of its "Global Automotive Executive Survey (GAES)." This annual survey, now in its 25th year, was conducted with 775 executives from the global automotive industry. It analyzed the top 15% of "leading companies" that have driven continuous growth despite industrial uncertainty, diagnosing key issues and strategic directions for the automotive sector.

KPMG identified the following strategies for leading the global market: driving transformation, strengthening technological capabilities, building trust, managing geopolitical tensions, and fostering co-growth. Leading companies are not just reacting to crises; they are accelerating innovation by leveraging artificial intelligence (AI) and new technologies, shortening product launch cycles, and proactively responding to market volatility. Notably, 42% of leading companies cited technological innovation as the key growth driver over the next three years-twice the proportion of other companies.

KPMG advised that, to secure leadership in this changing environment, companies should reallocate capital to high-profit areas, redefine ROI (return on investment) metrics, improve decision-making efficiency using AI, restructure through mergers and acquisitions (M&A) and joint ventures (JV), and strengthen strategic communications with stakeholders.

While 86% of respondents said they are investing in AI and new technologies, only 20% of companies are actually prepared to apply these innovations to their businesses. The autonomous vehicle market is projected to grow at an average annual rate of 23% from 2025, reaching approximately $122 billion by 2030. Additionally, 87% of executives responded that autonomous driving will become standard across all vehicle types.

KPMG emphasized that original equipment manufacturers (OEMs) must internalize core software related to security and safety. To enhance technological competitiveness, it suggested direct ownership and control of core systems, strengthening governance for collaboration with tech companies, establishing agile operating models, ensuring consistency in investment, and bridging organizational culture gaps.

According to the report, 48% of leading companies identified customer satisfaction as the key factor for long-term profitability, compared to only 10% of other companies. One-third of executives also said that maintaining customer relationships has become more challenging after transitioning to digital sales systems. KPMG noted, "The problem lies in companies' inability to effectively connect and utilize the customer data they possess," highlighting that providing personalized experiences based on data is crucial for building trust. Leading companies were found to clearly identify customers' willingness to pay based on data, which is important as it can lead to better management of customer expectations and the discovery of new business models. In fact, 45% of leading companies prioritized managing customer expectations and discovering new business models, more than double the rate among other companies (20%).

Meanwhile, as supply chain complexity intensifies due to tariffs, sanctions, and sustainability regulations, 94% of companies thoroughly prepared for supply chain disruptions and sustainability transitions exceeded their profitability targets, while only 45% of unprepared companies did so. The report recommends that companies effectively manage geopolitical risks by pursuing phased localization focused on key regions, implementing AI-based risk monitoring, establishing regulatory risk response systems, designing supply chains integrated with sustainability, and developing scenario-based response strategies.

As competitive factors in the automotive industry shift from manufacturing efficiency and design to software, AI, sustainability, and customer experience, building a collaborative ecosystem across industries has become essential. Leading companies recognize the importance of expanding strategic alliances and partnerships in areas such as research and development, the circular economy, and cybersecurity. They also indicated the need to pursue organic collaboration models through joint investment, operations, and learning, rather than simple integration. KPMG suggested that companies should focus not only on closing capability gaps within partnerships, but also on developing ecosystem-centered strategies, managing shared goals based on governance, building trust-based relationships, and establishing industry standards and norms.

Kim Jaeyeon, Executive Director and Automotive Industry Leader at Samjong KPMG, stated, "The challenging automotive industry will remain a land of infinite opportunity for companies that boldly lead change," and emphasized, "For domestic companies to lead the global market, they must pursue high-profit innovation, proactive use of technology, strengthening customer trust, regionally tailored supply chains, and transition into coordinators of collaborative ecosystems."

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