A survey of 240 global leaders in the industrial manufacturing and automotive sectors reveals that 74% of CEOs remain optimistic about the global economy’s growth prospects. Confidence in their own industries is even higher, with 80% projecting significant growth opportunities despite ongoing economic uncertainties.
The findings, part of the KPMG 2024 CEO Outlook, highlight key challenges, including economic instability (cited by two-thirds of respondents), the adoption of generative AI and advanced technologies (53%), and geopolitical complexities (45%). To drive expansion, CEOs are focusing on mergers and acquisitions (M&A), enhancing employee value propositions, and advancing digital transformation. While 31% of industrial manufacturing CEOs emphasize inorganic growth, 29% of automotive leaders see M&A as vital for their strategic objectives, especially in areas like microchips and EV battery technologies.
Innovative technologies, particularly AI, are central to future growth. Generative AI is a significant investment priority, with 63% of automotive CEOs prioritizing it compared to a more cautious approach from industrial manufacturing leaders (68% neutral). CEOs acknowledge barriers such as ethical concerns, regulation, and costs, with two-thirds urging for faster regulatory clarity.
AI applications span IT (60%), sales and marketing (57%), manufacturing (50% in automotive), and R&D (40%), demonstrating its transformative potential across functions. Despite these advancements, 74% of CEOs believe job numbers will remain stable, emphasizing the importance of upskilling and resource redeployment.
The report underscores the importance of trust-building and environmental sustainability. Three-quarters of CEOs are committed to community engagement and willing to divest profitable segments that harm their organization’s reputation. However, 60% note that ESG expectations evolve faster than their strategies, prompting 67% to adapt communication efforts.
Achieving net-zero remains a priority, with supply chain decarbonization identified as the biggest hurdle for industrial manufacturing (74%) and automotive (38%) CEOs. Jeffry Jacob, Partner and Head of Automotive at KPMG India, described the industry sentiment as “optimistic yet cautious,” noting stabilized economic conditions and reduced costs as drivers of potential earnings growth. However, geopolitical uncertainties, including oil price volatility, could impact future scenarios.
Rohan Rao, Partner for Automotive and Electric Mobility at KPMG India, highlighted the trend of consolidation in the automotive sector, driven by overcapacity and the need for OEMs to acquire expertise in EV-related technologies. This shift is likely to increase partnerships, joint ventures, and acquisitions in the years ahead.
