Survey: Auto execs plan to increase investments in plants and distribution image

More and more auto executives around the world say they are planning to increase investments in plants and distribution networks as fears of overcapacity decline.

According to a survey released today by financial advisory company KPMG, auto execs are becoming more optimistic about the market despite economic worries in Europe and the slowing down of growth in China.

64 percent of automotive executives from around the world now plan on increasing plant investments within the next five years, the survey finds. A year ago, only 55 percent of the execs said the same thing. A recent study from IHS Automotive predicted global auto sales will rise 27 percent to 100 million units in five years. Global sales are expected to exceed for the first time ever 80 million vehicles in 2012.

Global overcapacity has been a permanent concern in industry forecasts. Last year 36 percent of the executives questioned by KPMG said they expected more than 21 percent factory overcapacity. This year, the number declined to 29 percent.

“We read from this outlook that automotive is a bright spot in the global economy. They’re envisioning growth. China continues to grow, albeit at a slower pace than before. Europe is uncertain, but North America is growing. The U.S. market holds promise for companies around the world right now,” said Gary Silberg, KPMG’s national leader for automotive industry activity.

KPMG has surveyed industry decision makers about their outlook every year since 1999.

Source: Automotive News