A new wave of optimism is overtaking the U.S. auto industry as it rebounds from
the depths of the recession and a brutal restructuring, according to Booz &
Company's second annual U.S. Automotive Industry Survey and Confidence Index.
In February and March of 2012, Booz & Company surveyed more than 200
executives from more than 75 automotive vehicle manufacturers and suppliers.
Key findings include:
• Relative to last year, industry executives are significantly more bullish
on the state of the automotive industry; 94 percent of OEMs and 92 percent of
suppliers described it as either "somewhat better" or "much better" than last
year.
• Relative to 2011, respondents are significantly more confident in the
long-term prospects of full hybrid powertrains (70 percent more confident than
last year) and mild hybrid powertrains (65 percent), but less confident in the
future adoption of plug-in hybrid (46 percent), battery electric (29 percent),
and fuel-cell electric powertrains (25 percent).
• Automotive executives cite Hyundai/Kia (88 percent) and Volkswagen/Audi (72
percent) as the OEMs most likely to grow market share over the next five
years.
• 86 percent of supplier executives and 72 percent of OEM executives say the
Detroit Three will maintain or grow market share next year.
• 53 percent of respondents project a U.S. market share of 4 percent or more
for Chinese OEMs by 2020.
• With continued government support, 57 percent of respondents believe that
alternative powertrains will command more than 10 percent of the market by 2020.
However, without continued government support, only 30 percent of respondents
have the same expectation.
• 78 percent of OEM respondents say they are either holding the line on
incentives or significantly reducing them.
• 34 percent of suppliers and 50 percent of OEMs say cuts in capacity have
left them constrained.
• 55 percent of OEMs and 42 percent of suppliers say they were impacted by
the 2011 Japanese earthquake and tsunami, demonstrating how global the U.S. auto
supply chain is today.
Four key factors emerged from the survey that will shape the automotive
industry in the next two years.
• Reemergence of Fundamentals: The U.S. auto industry has learned the tough
lessons of recession-driven restructuring, and this is driving a "back to
basics" approach focused on strengthening balance sheets, producing excellent
vehicles, and not letting supply get ahead of demand.
• Shifting Demand Centers: Emerging markets are gaining steam, and all
automakers need to learn how to deal with different economies, consumers, and
competitors.
• Powertrain and Technology Uncertainty: Alternative powertrains are still in
play, but their success depends largely on government support and fuel prices.
The industry is moving toward fully digital, connected cars, but automakers are
struggling to decide what to place their technology bets on, and how.
• Interconnected Supply Chain: The unfortunate events of the Japanese tsunami
and floods in Thailand brought home the interconnectedness of the global supply
chain; 92 percent of OEMs and 85 percent of suppliers say they are seeking ways
to mitigate these risks in the future.
