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Examining Auto’s Future: 2020 Deloitte Global Automotive Consumer Study

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Key takeaways

  • Most U.S. consumers (63%) believe full battery electric vehicles (BEVs) should have a minimum driving range of 200 miles or more
  • Fifty-eight percent of U.S. consumers think battery operated vehicles are better for the environment when compared to traditional gasoline/diesel vehicles
  • Nearly half of U.S. consumers (48%) believe that fully autonomous cars will be unsafe
  • More than half (58%) of U.S. consumers indicated they are not willing to pay more than $500 for autonomous vehicle (AV) technology

Why this matters
Deloitte surveyed more than 35,000 driving-aged consumers, from 20 countries, across the globe. Conducted online, the study helps to provide insights into a variety of critical issues impacting the automotive sector.

Demand for electrified vehicles accelerates
Automakers still have reason to invest in developing new powertrain technologies, as interest in alternative-fuel vehicles is rising in several global markets and in many countries policy makers are implementing stronger environmental policies. In the U.S., where a combination of a more restrained environmental policy, low fuel prices, and tight incentives have kept interest in hybrid and fully electric vehicles largely at bay, 41% of consumers said they are actively considering an alternative-fuel vehicle (including hybrid electric, and battery-powered electric) in the future, up from only 29% last year.

EV charging infrastructure: a mixed bag
Despite EV technology improving each year, consumers still need to be convinced battery range and charging infrastructure is worth their EV purchase. Lack of electric vehicle charging infrastructure is the biggest concern for consumers in Republic of Korea, India, U.S., and Japan.

Furthermore, even though 41% of U.S. consumers believe full battery vehicles should have a range of at least 300 miles, the average vehicle owner travels only about 27 miles per day. And surprisingly, a significant proportion of consumers are willing to wait between 30 minutes and one hour to fully charge an electric vehicle. In the U.S., 27% of survey respondents are willing to wait between 30 minutes and one hour, with percentages even higher in Republic of Korea (29%), Germany (30%), India (35%), and China (40%).

Interest in autonomous vehicles stalled in most countries
Consumer perception regarding the safety of self-driving vehicles remains stalled since last year in most countries. In the U.S., nearly half of consumers (48%) think that fully self-driving cars will be unsafe. This apprehension extends to commercial vehicles, as well. More than two thirds (68%) of consumers noted that they were concerned about commercial vehicles operating in autonomous mode on the highway.

Across most global markets covered in this year’s study, just under half of respondents in several countries believed that AV technology will not be safe. In fact, in India and China, the percentage of people that think autonomous vehicles will not be safe has increased to 58% and 35%, respectively. This trend goes hand in hand with consumers’ views on testing autonomous vehicles, with over half of consumers in India (57%) and the U.S. (51%) concerned by the idea of autonomous vehicles being tested in areas where they live.

R&D continues, consumers lack willingness to pay
Original equipment manufacturers continue to spend billions on R&D in advanced vehicle features with the assumption that consumers will pay a premium to gain access to these advanced technologies when they appear on the market. However, results from this year’s study reinforce our past findings that achieving a return on invested capital for new technologies may be more difficult than some automakers think. Notably, consumers in the U.S. (34%) indicate that they are not willing to pay extra for AV technology. And, for those willing to pay anything extra, it does not cover the costs required to develop and deliver the technology.

This reluctance to pay for AV technology is part of a more general unwillingness among consumers in developed economies to spend extra for other types of advanced automotive features such as connectivity. Across the globe, almost half of the survey respondents in Germany (46%), and almost a third in the U.S. (31%) and Japan (28%), indicated they would not pay more for a vehicle that could communicate with other vehicles and with road infrastructure to improve safety.

Vehicle connectivity, privacy and data security concerns remain
When it comes to advantages of increased connectivity in vehicles, consumers are split on whether it’s worth it. People in India (80%) and China (76%) are embracing the idea at over twice the rate compared to Germany (36%), followed by the U.S. (46%).

In the meantime, opinions differ on specific concerns around connectivity, including the security of biometric data generated and shared by connected vehicles. Notably, in India where consumers believe increased connectivity is beneficial, the majority (69%) have concerns about privacy and data security. These same concerns are also high among the majority of other countries, including Germany (62%) and the U.S. (59%). On the contrary, who consumers would trust the most to manage the data being generated and shared by a connected car remains a mixed bag across the globe as automotive OEMs are not necessarily their choice, with fewer than 40% of consumers in most countries selecting OEMs for this role.

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Private markets forecast to grow to $4.9tn globally by 2025 and make up 10% of global AuM

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Assets under management (AuM) in private markets to expand by between $4.2 trillion and $5.5 trillion in the years up to 2025 in worst/best case scenarios for economic recovery, according to new analysis from PwC.

The report, Prime time for private markets: The new value creation playbook, examines prospects for four primarily illiquid asset classes of private equity (including venture capital), infrastructure, real estate and private credit across a range of scenarios for 2019-2025. 

The report projects significant growth for the value of private markets of $5.5tn (best case), $4.9tn (base case) and $4.2tn (worst case) depending on how global economic conditions respond to the disruption caused by Covid-19.

Will Jackson-Moore, global leader for private equity, real assets and sovereign funds at PwC says,‘The report highlights the continued emergence of private markets as a fast growing and highly impactful portion of global capital markets. Investors continue to look to the sector to deliver the yields that lower risk and more liquid asset classes struggle to match. 

‘Yet this is also an opportunity for private markets to take a lead on ESG and net zero commitments and demonstrate the impact they can make in public perception beyond public markets.’

Opportunities across asset classes

Even in the worst case scenario of a prolonged recession, the projections look ahead to growth of almost 50%  up to 2025.

While private equity is very much “the asset class of the moment” there is evidence that there are significant opportunities for growth and returns in areas such as real estate, infrastructure and private credit.

Will Jackson-Moore says,‘While opportunities for growth are out there, it is important to emphasise that returns will be harder to find and be more aggressively fought for. Managers will need to be innovative in their approach to value creation and respond swiftly to changing investors and governmental expectations as economies recover from the effects of the crisis.’

ESG and going beyond financial return

Will Jackson-Moore says,‘Our research highlights the extent to which financial return is no longer the sole driver of private markets growth. ESG and Net Zero commitments now represent a significant source of value preservation and creation. 

‘Private market managers need to respond by looking at how to apply an ESG lens to investment strategy and product development. Whether it is in impact turnaround initiatives in which ‘dirty’ production facilities are turned green, or building strong commitment to diversity and inclusion at your organisation, these matters are no longer an overlay.’

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Key Reforms Needed to Grow Albania’s E-commerce Sector

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A new World Bank Albania E-Commerce Diagnostic highlights key reforms needed to better leverage digital trade as opportunity for economic development.

E-commerce can be an important asset for Albania. Online sales channels allow businesses to reach more customers, at home and abroad. Customers gain from greater convenience and more choice. Sectors enabling e-commerce can create new jobs, including in technology companies, logistics and online payments.

During the COVID-19 pandemic, online markets are playing a particularly important role by allowing economic life to continue despite social distancing. The 2020 World Bank Enterprise Survey reveals that almost 20 percent of Albanian firms surveyed reported having either started or increased online business activity during the crisis.

To help Albania seize the digital trade opportunity, this new diagnostic identifies a roadmap of critical reforms in logistics and customs;  digital connectivity; online payments; private sector capabilities and skills; and the e-commerce regulatory framework.

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Digitalizing the Maritime Sector Set To Boost the Competitiveness of Global Trade

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A new report launched today by the World Bank and the International Association of Ports and Harbors (IAPH) shows that better digital collaboration between private and public entities across the maritime supply chain will result in significant efficiency gains, safer and more resilient supply chains, and lower emissions.

Maritime transport carries over 90% of global merchandise trade, totaling some 11 billion tons of cargo per year. Digitalizing the sector would bring wide-ranging economic benefits and contribute to a stronger, more sustainable recovery.

Accelerating Digitalization: Critical Actions to Strengthen the Resilience of the Maritime Supply Chain describes how collaborative use of digital technology can help streamline all aspects of maritime transport, from cross-border processes and documentation to communications between ship and shore, with a special focus on ports.

The COVID-19 crisis has evidenced a key benefit of digitizing waterborne and landside operations: meeting the urgent needs to minimize human interaction and enhance the resilience of supply chains against future crises.

“In many of our client countries, inefficiencies in the maritime sector result in delays and higher logistics costs, with an adverse impact on the entire economy. Digitization gives us a unique chance to address this issue,” noted Makhtar Diop, World Bank Vice President for Infrastructure. “Beyond immediate benefits to the maritime sector, digitalization will help countries participate more fully in the global economy, and will lead to better development outcomes.”

IAPH Managing Director of Policy and Strategy, Dr Patrick Verhoeven, added: “the report’s short and medium term measures to accelerate digitalization have the proven potential to improve supply chain resilience and efficiency whilst addressing potential risks related to cybersecurity. However, necessary policy reform is also vital. Digitalization is not just a matter of technology but, more importantly, of change management, data collaboration, and political commitment.”

Although the International Maritime Organization (IMO) has made it mandatory for all its member countries to exchange key data electronically (the FAL convention), a recent IAPH survey reveals that only a third of over 100 responding ports comply with that requirement. The main barriers to digitalize cited by the ports were the legal framework in their countries or regions and persuading the multiple private-public stakeholders to collaborate, not the technology.

The report analyzes numerous technologies applied already by some from the world’s leading port and maritime communities, including big data, the internet of things (IoT), fifth-generation technology (5G), blockchain solutions, wearable devices, unmanned aircraft systems, and other smart technology-based methods to improve performance and economic competitiveness.

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