US automotive CEOs are stepping up investment in innovation, artificial intelligence (AI) and emerging technologies compared to their global peers, according to a study released by KPMG. US automotive CEOs are stepping up investment in innovation, artificial intelligence (AI) and emerging technologies compared to their global peers, according to a study released by KPMG.
According to the research, based on an in-depth survey of 34 US automotive CEOs and 62 global automotive CEOs, 59% of the US CEOs say their companies intend to invest heavily in AI in the next 12 months, compared to 39% of global CEOs.
Three quarters (74%) of US CEOs will be stepping up investment in emerging technologies in the next year compared to just half (51%) of global CEOs.
Twice as many (82%) of US CEOs say they will increase investment in innovation, compared to the proportion of global CEOs (45%).“Our study found higher levels of optimism and confidence by US auto CEOs moving forward in their willingness to invest in emerging technology and innovation compared to their global counterparts,” said Gary Silberg, automotive sector leader at KPMG. Silberg says that CEOs recognize that this is a critical juncture, one where they will make choices on whether to remain pure automakers or to become mobility service providers, or both.
“Given the rapid pace of innovation and its inherit complexities it’s really hard to be a CEO knowing that the investment decisions made today, or not made, will have profound implications on the future of their company. Moreover, breakthroughs in AI, especially in deep learning, are having an unprecedented impact on the advancement of autonomous vehicles and how customers are interacting with cars,” Silberg added.
The KPMG study also found US auto CEOs are less concerned about increasing market share than their global peers, (33% versus 55%).
While CEOs conveyed a clear sense of prioritizing investment in cognitive and artificial technology, concerns over readiness to adopt these technologies persist. In fact, nearly 40% of both US and global automotive CEOs agreed with the statement that their organization is not ready to adopt advanced AI technology.
Additionally, 56% of US automotive CEOs and 48% globally expressed concerns that their organizations do not currently have the sensory capabilities and innovative processes to respond to this rapid disruption.
“In this age of autonomy and mobility, traditional automakers find themselves competing with new entrants, from technology giants to startups,” said Tom Mayor, national strategy leader for industrial manufacturing at KPMG. “For auto companies to thrive in this new environment, they must solve what KPMG calls the ‘clockspeed dilemma’ - the need to balance traditional 5-7 year auto product cycles with the new, consumer electronics-type cycle. In order to do that, they need new processes, capabilities and talent.”