Small car sales may accelerate over next 5 years: KPMG survey

By: | Updated: January 8, 2015 5:02 PM

Sales potential of the basic and small car segment is set to accelerate over the next five years as the consumers...

Sales potential of the basic and small car segment is set to accelerate over the next five years as the consumers are still fixated on traditional product issues that will drive their purchasing decisions. This was revealed in the latest annual KPMG Global Automotive Executive Survey.

In 2014 and 2013, the auto industry saw 67 per cent of buyers considering fuel efficiency as the most important factor when buying a car, followed by enhanced vehicle lifespan (53 per cent), safety innovation (52 per cent) and ergonomics/comfort (49 per cent).

According to KPMG, one factor that has gained importance is enhanced vehicle lifespan, which ranked eighth in 2013, but is now the second most important factor influencing the buying decision, globally.

The use of alternative fuel technologies remains a low priority, suggesting strongly that, like last year’s survey, the consumer purchase decision is driven more by the wallet than the conscience. Concerns over vehicle quality have risen, following several high-profile product recalls, with more and more customers now seeking vehicles with longer lifespans.

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. Despite the many new technology-based corporations looking to win a slice of the competitive automotive sector because of the newly emerging mobility culture, the established premium and mass market OEMs may continue to dominate the landscape over the next decade, says the survey.

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 percent in downsizing and optimisation of internal combustion engines and 27 percent in fuel cell electrical vehicles. Brazil, Russia and India each are expected to export more than one million vehicles to other markets in the next three to five years.

Not a single emerging market OEM is predicted to make the top 10 by the end of this decade in the mass market segment. German automakers are set to continue their domination on the premium car segment.

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