Survey says auto execs pessimistic about future

DETROIT (AP) — Auto executives across the globe are increasingly pessimistic about their industry, and only a small number expect their companies’ profits to rise in the next five years, according to an annual survey.

he survey of 200 senior executives worldwide painted a bleak picture for the industry, with most predicting continued restructuring and too much factory capacity across the globe, according to the survey conducted by the accounting and advisory firm KPMG LLP.

Many expected Detroit’s three automakers to continue their market share decline during the next five years, with Toyota Motor Corp., Hyundai Motor Co., Honda Motor Co., and Volkswagen AG continuing to gain. But they also thought the U.S.-based manufacturers would continue to become more efficient and competitive.

“Clearly the result this year compared to past years we’ve done the survey is a much gloomier view,” Betsy Meter, KPMG’s automotive audit sector leader, said in an interview.

In 2007, executives in emerging markets such as China were more optimistic than those in mature markets like the U.S., but now even they generally are a bit more pessimistic, Meter said.

Only 15 percent of the execs surveyed expect profits to increase in five years, while 24 percent predicted declines and 46 percent said the bottom line was too volatile and unpredictable to forecast, according to the survey results released Thursday.

But half the executives, from automakers and parts suppliers, said the U.S.-based manufacturers are succeeding with restructuring and on a path to becoming more competitive. Forty-three percent were neutral and 6 percent disagreed, according to the survey.

A year ago, 58 percent saw the U.S. automakers succeeding, with 10 percent disagreeing.

The majority, 57 percent, expected the U.S. automakers to finish their restructuring before 2011, down from 64 percent a year ago. But the survey was taken before December, when General Motors Corp. and Chrysler LLC received government loans that came with requirements to do more restructuring such as cutting labor costs.

Most executives surveyed this year also predicted more bankruptcies due to the worldwide auto recession, and they foresee significant increases in mergers and alliances.