Study Find Auto Execs Confident In Full Hybrid Powertrains

A new wave of optimism is overtaking the U.S. auto industry as it rebounds from the depths of the recession and a brutal restructuring, according to Booz & Company’s second annual U.S. Automotive Industry Survey and Confidence Index.

In February and March of 2012, Booz & Company surveyed more than 200 executives from more than 75 automotive vehicle manufacturers and suppliers.

Key findings include:

• Relative to last year, industry executives are significantly more bullish on the state of the automotive industry; 94 percent of OEMs and 92 percent of suppliers described it as either “somewhat better” or “much better” than last year.

• Relative to 2011, respondents are significantly more confident in the long-term prospects of full hybrid powertrains (70 percent more confident than last year) and mild hybrid powertrains (65 percent), but less confident in the future adoption of plug-in hybrid (46 percent), battery electric (29 percent), and fuel-cell electric powertrains (25 percent).

• Automotive executives cite Hyundai/Kia (88 percent) and Volkswagen/Audi (72 percent) as the OEMs most likely to grow market share over the next five years.

• 86 percent of supplier executives and 72 percent of OEM executives say the Detroit Three will maintain or grow market share next year.

• 53 percent of respondents project a U.S. market share of 4 percent or more for Chinese OEMs by 2020.

• With continued government support, 57 percent of respondents believe that alternative powertrains will command more than 10 percent of the market by 2020. However, without continued government support, only 30 percent of respondents have the same expectation.

• 78 percent of OEM respondents say they are either holding the line on incentives or significantly reducing them.

• 34 percent of suppliers and 50 percent of OEMs say cuts in capacity have left them constrained.

• 55 percent of OEMs and 42 percent of suppliers say they were impacted by the 2011 Japanese earthquake and tsunami, demonstrating how global the U.S. auto supply chain is today.

Four key factors emerged from the survey that will shape the automotive industry in the next two years.

• Reemergence of Fundamentals: The U.S. auto industry has learned the tough lessons of recession-driven restructuring, and this is driving a “back to basics” approach focused on strengthening balance sheets, producing excellent vehicles, and not letting supply get ahead of demand.

• Shifting Demand Centers: Emerging markets are gaining steam, and all automakers need to learn how to deal with different economies, consumers, and competitors.

• Powertrain and Technology Uncertainty: Alternative powertrains are still in play, but their success depends largely on government support and fuel prices. The industry is moving toward fully digital, connected cars, but automakers are struggling to decide what to place their technology bets on, and how.

• Interconnected Supply Chain: The unfortunate events of the Japanese tsunami and floods in Thailand brought home the interconnectedness of the global supply chain; 92 percent of OEMs and 85 percent of suppliers say they are seeking ways to mitigate these risks in the future.

A full copy of the study can be accessed here.

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  • Libertarian Don

    Hybrids are seriously threatened by two factors: 1) Super high output/efficiency TDI gas engines that deliver Pruis fuel economy without the mass and complexity (i.e.- the 1 liter 3 cylinder 125 hp 2013 Ford Focus that is reported to deliver 58 mpg highway) and 2) Newfound domestic oil supplies which have gone from 18 billion barrels to 1 trillion barrels estimate in the last decade plus the oil supplies from Canada (pseudo-domesitic).
    I could see hybrids surviving the increase in domestic supply but the plug-ins will only survive with serious government help and most favorite company (campaign donor) corruption. For us plug-in fans don’t despair too much as battery technology will continue to advance rapidly with portable electronic demand, We might have to wait another 10-20 years for plug-ins to enter the mainstream but they will eventually. I hope GM is wise enough not to totally abandon the Volt technology but keep it going as a niche car under slow development. The war on coal hasn’t helped the Volt in Ohio.

  • priusbob

    Hybrids definitely serve a purpose. Currently the ford focus discussed is not available in the US… In fact only companies offering diesels in US are German car Manufacturers…

    And the real Diesel advantage is if you drive more highway miles. For a commuter vehicle, it won’t stack up to the hybrids… My wife used car to trim to her mom’s house and got 57MPG on highway. And she definitely doesn’t baby the car and definitely does not “glide”… it’s gas or break… in her mind there is no glide pedal..

  • Van

    I do hope the next generation car traction battery is not 10-20 years away. Two separate OEM’s have indicated, abeit vaguely, that the next generation battery will be in their 2015 model vehicles. The NMC battery produces almost twice the specific power of today’s large cell lithium batteries. Both Nissan and Toyota were working on it in the past, but nothing of I know of has been reported recently.

    As to the comparison of the diesel and the plug-in hybrid, besides the electric advantage in urban mileage, we also need to discuss emissions. The particulate and NOX issues of diesels also do not compare well in urban driving, especially to schools and playgrounds.

    Last point, it will be interesting to see if a diesel/hybrid drive out performs the gas/hybrid drives of today. If they do, then we would have the best of both worlds.