Attracting Right Talent and Managing Risk Top Priorities For Automotive Industry, According to PwC

DETROIT, March 5, 2012 /PRNewswire/ -- Attracting and retaining talent, cutting costs, investing in innovation, managing risk, and economic uncertainty are top concerns among automotive CEOs, according to PwC's 15th Annual Global CEO Survey automotive summary. More than two thirds (69%) of automotive CEOs plan to cut costs in the next 12 months as they balance the need to attract talent and invest in innovation. Of the 104 CEOs from 31 countries participating in the annual survey, 72 percent intend to focus more heavily on innovating to improve existing processes and product development. 

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As economic uncertainty looms, automotive CEOs are keeping their eye on the economic environment. More than half (57%) say their companies have been directly affected by the sovereign debt crisis.

More than three fourths (78%) of automotive CEOs plan to change their R&D and innovation capacity in 2012, allowing them to bring new products to market that meet stricter regulatory standards and changing consumer preferences, as well as to realize future growth.   

Managing operational risks while new government regulations and restrictions are implemented is also a top priority for automotive CEOs. Many countries have introduced new tariffs and tax increases to promote their own domestic automotive industries and retain jobs. This is a concern for many automotive CEOs, according to the report, with nearly half (47%) concerned about government protectionism.

"The global automotive industry is a growth business and companies continue to expand their footprint in emerging economies while weighing risks," said Rick Hanna, global automotive leader, PwC. "From regulatory factors to fluctuating currencies, automotive executives are pressured to find a balance between global operations, product innovation and securing top talent to compete."

Nearly half (46%) of automotive CEOs said finding the right talent is a challenge due to a lack of skilled workers. In addition, 56 percent fear that the lack of key skills could drag down growth. This is particularly concerning in growth markets such as China. The majority (89%) of automotive CEOs believe that the private sector needs to invest and develop a skilled workforce to achieve future growth.  Although funds are limited, more than three-quarters of automotive CEOs have invested in some of the growth markets where they have operations, such as China and Brazil.

Automotive CEOs also specified that China and Brazil are key markets for future growth.  Once again, they are particularly interested in China, with 38 percent considering it a top future market, followed by Brazil at 24 percent and the U.S. at 22 percent. PwC's Autofacts^®, a team of automotive industry specialists dedicated to ongoing analysis of sector trends, forecasts that China will produce 28 million units a year by 2018, compared with just 11.1 million units in the U.S. and 6.4 in Germany. 

The automotive industry has also needed to adjust to changing consumer preferences and regulatory requirements in various markets. For example, more than half (59%) of automotive CEOs have modified products and services to accommodate the Chinese market. 

"Automotive companies need to carefully consider their global growth strategies," said Hanna. "Automotive companies recognize the importance of having strategies in place to meet varied regulatory requirements as well as producing vehicles to appeal to local consumer preferences. Determining the right investment in the brand, platforms and products for specific markets is imperative for long-term growth."

The latest Annual Global CEO Survey: Automotive Industry Summary includes interviews with Douglas R. Oberhelman, Chairman and CEO of Caterpillar Inc., and Baba Kalyani, Chairman and Managing Director of Bharat Forge Ltd. More in-depth results, industry trends and CEO viewpoints can be found in the 15th Annual Global CEO Survey and the Automotive Industry Summary at www.pwc.com/ceosurvey or www.pwc.com/auto. Additional industry summaries are also available. 

About PwC's 15th Annual Global CEO Survey Methodology
For PwC's 15th Annual Global CEO Survey, 1,258 interviews were conducted in 60 countries in the last quarter of 2011. Interviews were conducted in Western Europe, Asia Pacific, Latin America, North America, Central and Eastern Europe, and the Middle East & Africa.

The full survey report with supporting graphics can be downloaded at www.pwc.com/ceosurvey.

PwC's 15th Global CEO Survey was launched at a press conference in Davos on the eve of the World Economic Forum's Annual Meeting. To download broadcast-quality clips from the press conference and other supporting footage, visit http://press.pwc.com. To watch the full webcast of the press conference, visit http://www.pwc.com/davoswebcast.

About PwC's Automotive Practice
PwC's global automotive practice leverages its extensive experience in the industry to help companies solve complex business challenges with efficiency and quality. One of PwC's global automotive practice's key competitive advantages is Autofacts^®, a team of automotive industry specialists dedicated to ongoing analysis of sector trends. Autofacts provides our team of more than 4,600 automotive professionals and our clients with data and analysis to assess implications, make recommendations, and support decisions to compete in the global marketplace.

About the PwC Network
PwC firms help organisations and individuals create the value they're looking for. We're a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com. 

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