The
auto industry must reconcile
these two different rates of change. It
must act as if it were simultaneously
in two worlds, moving at two different
speeds. To do so is what successful
innovation now means.
It is inspiring. Innovation in the current
auto space will transform the very
nature of transportation and change
people’s lives along the way. But this
kind of innovation is also really hard.
Most organizations do not embrace
imaginative solutions to problems. In
fact, they stifle them. Never forget:
the man who brought us relativity,
quantum physics, and E=mc
2
was
ignored and even laughed at before
the world recognized him as an
innovative genius. In the current
environment, the auto industry doesn’t
have time to ignore its true innovators.
It must solve the clockspeed
dilemma today. If the industry does, it
will be powerfully equipped to address
the findings we reached from this
year’s research.
Gary Silberg
National Automotive
Industry Leader
The clockspeed dilemma 3
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S.
member firm of the KPMG network of independent member firms affiliated with
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y. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through
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Seven key findings to keep your eyes on.
To create the multiple clockspeeds it now faces, the auto industry must institutionalize faster-paced
innovation capacity that dovetails with its current clockspeed. We have ideas on how to do that. It’s an
exciting, powerful problem for the industry. Let’s get to the details.
Personal miles will soar.
Younger and older age groups
are making small changes in their
mobility decisions that will drive big
changes in personal miles traveled.
Our models project as much as an
additional trillion or more by 2050.
That increase will have a profound but
unknown impact on vehicle sales, car
ownership models, energy demand,
and infrastructure.
Welcome to the world of
tailored premiums.
Our focus groups tell us premium
experience might diversify according
to demographics and user situation.
If so, what millennials or their
children think of as premium won’t
be the same as baby boomers
today. A rolling office? A moving
entertainment center? Zero to 60 in
3 seconds or less? Automakers must
pay attention to increasingly tailored
consumer demand.
The tech giants and disruptive
start‑ups are here to stay.
The pyramid OEMs once ruled
now has company at the top. Car
companies are standing shoulder to
shoulder with new players who can
sense consumer changes and drive
new technologies into the market at a
very fast pace.
Build flexible architecture for an
ever‑changing future.
To interface with all the evolving
technologies, your vehicles must
have a flexible architecture. Imagine
what would happen if your company
locked itself into Myspace rather than
Facebook: no one would buy your car.
Choose your core
competencies wisely.
Accept that you will never keep up
with all the technological changes or
compete in all areas. The ecosystem
is too vast and changing, and you
don’t have enough capital to invest in
everything.
Sense the ecosystem from its
center to its farthest reaches.
It’s critical that you keep up with
all the innovative forces inside and
outside the industry, which are rapidly
and constantly transforming consumer
expectations.
Embrace the value of failure.
Nobody gets it right the first time, so
fail fast in small ways and learn a lot
from your failures.
Key changes: Big opportunities
4
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered
trademarks or trademarks of KPMG International. NDPPS 404853
How will the
balance of
power shift
amongst the
players?
Who are the
key players?
How and
when will
investments
be made?
What are the
competitive
strategies?
Auto Venture
Capital
Traditional
Tier 1s
Global
Regulators
Universities
and Research
Labs
Technology
Start-ups
Potential
Nontraditional
OEMs
High Tech
Entrants
Venture
Capital
Traditional
OEMs
More than ever we believe the ecosystem is evolving…
It is just happening faster than we expected
Last year, we hypothesized that the structure of the ecosystem in the automotive industry was going
to change. High-tech entrants and tech start-ups would match the OEMs at providing technology
and revolutionizing the industry. This past year proved that is happening at a faster rate than we
anticipated. New technologies are coming from every direction, so auto companies have to broaden
their radar to keep pace. In the future, horsepower may matter less than processing power. Winning
companies will be nimble, future-oriented, and prepared to invest in new technologies, new talent,
and new strategic alliances.
The clockspeed dilemma 5
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through
complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853