As gas prices fluctuated up and down over the last year, car buyers were more and then less interested in smaller, more fuel-efficient vehicles. But the overall landscape has shifted to one where car buyers will constantly be looking for vehicles that are burn less fuel to get around.
This viewpoint comes from KPMG, an audit, tax and advisory firm, which surveyed 150 senior executives at vehicle manufacturing companies and vehicle suppliers around the world. Hybrids and small cars are expected to be the new growth markets, with between 200,000 and 500,000 hybrids expected to be sold in the U.S. in 2007 (about 200,000 were sold in 2006). Consumer's primary concerns when buying a new car will be fuel efficiency and quality (89 percent and 88 percent respectively), the execs think. These numbers are up from (84 percent and 87 percent, respectively, last year). Only 28 percent of execs said that SUVs would gain market share over the next five years.

Other findings, directly from the press release:
  • 95 percent of North American executives said they were more likely to see a rise in hybrid sales over the next five years, while 67 percent of North American executives predicted crossovers.
  • 89 percent of European executives were optimistic on the sale of low-cost vehicles, and 57 percent forecasted luxury vehicles sales would increase.
  • 37 percent of Asian executives are more confident about the sales of large pick-up trucks, while 72 percent expected car sales to rise.
  • 90 percent of executives believe consumers will hold on to their new cars for three to seven years.
  • 94 percent of executives consider product quality as the most important industry issue in 2006, while 89 percent named cost reduction.
  • 66 percent of executives cited innovations in manufacturing as the greatest source of cost savings for vehicle manufacturers, followed by materials innovation and outsourcing to countries like China and Eastern Europe according to 61 percent of executives respectively.
  • 48 percent of executives named new models and 43 percent said new technologies are the areas where manufacturers will increase investment.
[Source: KPMG LLP]


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