Manufacturing and automotive industry: CEOs' assessment of current developments

From macroeconomic developments to the use of artificial intelligence and ESG: how do executives from the manufacturing and automotive industries rate the most pressing current issues? The KPMG Industrial Manufacturing and Automotive CEO Outlook, a special extract from the comprehensive KPMG CEO Outlook 2024, provides the answers. 240 CEOs worldwide from both sectors took part in the overall survey in late summer 2024. Their assessments provide a practical insight into the status quo in companies and shed light on industry trends.

One key finding is that CEOs are generally confident despite various uncertainties and upheavals. On the one hand, this is due to the adjustment measures already implemented to increase resilience and agility in order to manage the consequences of higher interest rates, costs and inflation rates. On the other hand, industrial production remains a robust anchor of stability in many economies. The results of the study also reflect the expectation that efficiency can be optimised in the future through the integration of innovative technologies. Last but not least, automotive CEOs are focussing on extensive transformation processes in the field of electromobility.

According to the CEOs, artificial intelligence (AI) has great potential. It is clear that managers are aware of AI risks. In order to dispel concerns regarding cyber security and data protection, respondents are focussing on holistic governance and employee training. In contrast, CEOs see risks along the supply chain: the transparency of processes should be further increased in the future and sustainable business practices should be promoted. The latter is seen as a particularly complex task.

Remarkable results at a glance:

• 74 per cent of respondents are optimistic about the growth prospects for the global economy. 31 per cent of automotive CEOs and 24 per cent of manufacturing CEOs expect their company to increase profits by more than five per cent.
• More than 70 per cent of respondents believe that generative AI will not have a significant impact on the number of employees. However, upskilling employees will become essential. A lack of technical expertise is the biggest AI risk according to automotive CEOs and the third biggest according to manufacturing industry CEOs.
• 95 per cent of respondents predict a "complete return of their employees from the home office to the office" within the next three years. They are in favour of working in the office for their company, as they believe it is easier to collaborate face-to-face than working from home.
• 74 per cent of manufacturing CEOs consider the decarbonisation of their supply chain to be the biggest hurdle on the way to achieving net zero emissions targets. By contrast, only 38 per cent of automotive CEOs do. The majority of CEOs from both industries also say that ESG is already fully integrated into the value chain.

120 CEOs from the manufacturing industry and 120 CEOs from the automotive industry took part in the survey for the KPMG CEO Outlook 2024. The largest sub-sector in the manufacturing industry: mechanical engineering (53 per cent). All respondents manage companies with an annual turnover of over 500 million US dollars. Almost half of the respondents manage a company with annual sales of more than ten billion US dollars. The companies are located in eleven key markets: Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the United Kingdom and the USA.