Asia-Pacific Emerges as Key Driver of Automotive Industry Shift by 2035, KPMG Survey Finds

Brickinfo News Agency – The Asia-Pacific (ASPAC) region is positioned to drive the next phase of global automotive transformation, according to KPMG International’s 26th Global Automotive Executive Survey. Based on responses from 775 senior automotive executives worldwide, the report indicates that industry value pools, technological capabilities, and competitive influence are steadily shifting toward ASPAC, with 48 percent of respondents expecting six of the world's top 10 automotive original equipment manufacturers (OEMs) to be headquartered in China by 2035.

The survey highlights that ASPAC companies currently lead other regions in several technological areas. Fifty-seven percent of ASPAC respondents report significant investments in artificial intelligence (AI) and emerging technologies, ahead of 52 percent in Europe and 48 percent in the Americas. Additionally, 52 percent of ASPAC companies state that their autonomous-driving and advanced driver-assistance systems integration is established or embedded. In terms of regulatory readiness, 50 percent of ASPAC firms have established governance for the ethical and compliant use of AI and data, compared with 45 percent in Europe and 39 percent in the Americas.

As China accelerates its transition away from traditional hardware toward batteries, electronic control units, software platforms, and AI, other ASPAC markets—including India, Japan, and Southeast Asia—are expected to maintain multiple powertrain technologies over the coming years. Koichi Iguchi, Head of Automotive ASPAC region and Partner at KPMG Japan, noted that the pace of electrification, software adoption, and customer requirements varies across the region. He added that geopolitical and trade uncertainties are forcing companies to make market-specific decisions regarding manufacturing, sourcing, and capital allocation to balance supply security with flexibility.

On a global scale, software-defined vehicles and digital technologies are becoming the primary battleground. Fifty-one percent of surveyed executives expect software and digital technology to become the main source of competitive differentiation by 2035. While 49 percent of respondents describe their software-defined products and over-the-air capabilities as established, only 36 percent of AI and software initiatives have scaled beyond the pilot phase across organizations. Furthermore, 92 percent of companies report that moving a new digital or AI capability from pilot to enterprise-wide deployment takes at least 12 months, with more than one-third requiring over two years. Half of the respondents also indicated that customer trust in digital and connected features will determine market winners and losers over the next three years.

Because no single company can develop all required electrification, software, and AI capabilities independently, external collaboration is increasing. Globally, the share of value creation enabled by external partnerships and ecosystems is projected to grow from 30 percent today to 44 percent within the next three years. Dr. Andreas Ries, Global Head of Automotive at KPMG International, stated that success over the next decade will depend on identifying emerging value and moving quickly to capture it, with ASPAC playing a central role.

Songpon Kiatlertpongsa, Deal Advisory Partner at KPMG in Thailand, added that competitive advantage in the automotive sector will increasingly rely on software, AI, and ecosystem partnerships rather than manufacturing scale alone. For Thailand and the broader ASEAN region, the priority lies in utilizing their existing automotive manufacturing base while adapting to multiple mobility pathways, ranging from electrification and connected vehicles to digital services.