Faced with rising gas prices, consumers will opt for fuel-efficient low-cost cars and hybrids over the next five years rather than sport utility vehicles and luxury cars, a just released survey has indicated.
Auto executives believe that quality and fuel efficiency will be the top-two criteria consumers would use in deciding which car to buy, it found.
The global survey was conduced by KPMG LLP, a leading US-based audit, tax and advisory firm. It interviewed 140 senior automotive leaders for the survey.
The automotive executives interviewed represented companies in India, North America, Great Britain, France, Germany, Sweden, China, Korea and Japan. KPMG has released an annual survey of automotive executives since 1999.
"Automotive leaders are cognizant of the lasting impact of rising gas prices on the minds of consumers," said Betsy Meter, audit partner in KPMG's automotive practice. "The focus right now is on producing fuel-efficient vehicles that will meet consumer demand."
In the survey auto executives were asked their opinions on a number of categories of vehicles over the next five years and ranked hybrid cars -- which combine two power sources, usually gasoline and electricity -- number one, at 88 per cent, and low cost cars second, at 79 per cent.
Hybrids and low cost cars ranked significantly above all other categories.
At the other end of the spectrum, most auto executives believe that sales of larger, less fuel-efficient vehicles will decline over the next five years, with only 35 per cent predicting an increase in luxury-car sales and 36 per cent expecting sales of sport-utility vehicles to rise.
They are slightly more optimistic on minivans, at 40 per cent. Only 24 per cent expect pick-up trucks to increase market share in the next five years.
In breaking the categories down into a regional view, North American executives were more likely see a rise in hybrids and low-cost cars in the next five years.
Executives in both Europe and Asia were more optimistic on the sale of larger vehicles, such as minivans and SUVs, and Asian respondents are more optimistic about luxury vehicles and pick-up trucks, compared with their North American and European peers.
"While there are regional differences, there is one common theme," says KPMG's Meter. "Consumers worldwide are now on the same page. They desire a good quality, fuel efficient car."
When it comes to what consumers will look for most in a new car, 87 per cent of executives in the KPMG survey say that car-buyers will mostly base their purchase decision on quality while 84 per cent say fuel efficiency.
These factors ranked much higher than affordability, at 68 per cent, and significantly higher than sales incentives, at 47 per cent.
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