Industrial manufacturing and automotive sector CEOs are steering via a unstable enterprise setting with cautious optimism, in keeping with the KPMG 2024 Industrial Manufacturing and Automotive CEO Outlook. The report, based mostly on insights from 240 business leaders, highlights confidence in international financial progress, workforce dynamics, and the transformative influence of generative AI.
A powerful 74% of respondents expressed confidence in international financial progress prospects. Nevertheless, geopolitical tensions, together with conflicts within the Center East, stay a vital concern.
Jonathon Gill, International Head of Industrial Manufacturing at KPMG Worldwide, said, “Financial circumstances have stabilised, and prices have decreased. Sustained earnings progress is in CEOs’ sights, however geopolitical uncertainties may considerably influence future buying and selling circumstances.”
Workforce challenges and upskilling
CEOs are keenly conscious of workforce dynamics. Automotive leaders recognized worker retirements and an absence of expert replacements as the highest concern (30%). In the meantime, 33% of commercial manufacturing CEOs pointed to the challenges of data switch inside organisations.
Generative AI is seen as a transformative pressure, with over 70% of respondents asserting it’ll necessitate upskilling and useful resource redeployment slightly than result in widespread job losses.
Consolidation and partnerships to drive the long run
A placing 95% of CEOs predict a full return to workplace inside three years, reflecting a renewed give attention to collaboration and productiveness. On sustainability, 74% of commercial manufacturing CEOs cited the complexity of decarbonising provide chains as a significant barrier to reaching internet zero, in comparison with solely 38% of automotive CEOs.
The automotive sector is poised for consolidation and strategic acquisitions. Rohan Rao, Accomplice, Automotive and Lead – Electrical Mobility, KPMG in India, mentioned, “An excellent quantity of consolidation and offers are anticipated within the automotive business over the approaching years.”
“This isn’t solely due to some overcapacity that we’re witnessing out there however it’s additionally a results of authentic tools producers (OEMs) feeling the necessity to purchase new capabilities in areas comparable to microchips and batteries for EVs. This might spawn rising numbers of partnerships and JVs in addition to outright acquisitions.”
Dr. Andreas Ries, International Head of Automotive, KPMG Worldwide, mentioned, “I count on to see consolidation and offers within the automotive business over the approaching years, due to some overcapacity out there but additionally as a result of OEMs want to amass new capabilities in areas comparable to micro chips and batteries for EVs. That is more likely to spawn rising numbers of partnerships and JVs in addition to outright acquisitions. Will probably be a extremely lively market with appreciable levels of change.”
Optimism with warning
Jeffry Jacob, Accomplice, and Head (automotive), KPMG in India, mentioned, “A way of optimism laced with a little bit of warning is how I’d sum up the temper amongst industrial manufacturing and automotive CEOs. That mentioned, financial circumstances have stabilised with prices having decreased which suggests sustained earnings progress is one thing we may see.”
“Geopolitical Uncertainties are a key concern. How that performs out — together with impacts on oil costs — may have a big influence on future buying and selling eventualities,” he added.
As these industries navigate complexities and embrace alternatives, the give attention to innovation, sustainability, and workforce resilience will form their trajectories in 2024 and past.
