Automotive Manufacturing Industry M&A Update

For several years, M&A activity in the automotive manufacturing industry was subject to uncertainty stemming from the COVID-19 pandemic, with cross-border deals becoming more complex. However, the pandemic also resulted in new opportunities for consolidation within the industry, and new opportunities continue to arise.

There are 769 companies operating in the global auto manufacturing industry. The industry was valued at $2.7 trillion as of 2024. The market is expected to grow, and the level of competition is high and continuing to increase, driving more need for investment, innovation, and differentiation.

A large share of investment is taking place in the pursuit of CASE (Connected, Autonomous, Shared, Electrified) technologies. Dealmakers concentrate on securing supply chains and increasing resiliency rather than expanding globally. Electric vehicles are another significant investment area, especially as environmental concerns are shifting consumer preferences. This has created a highly competitive environment among automakers when it comes to cleaner energy, battery recycling, and the use of sustainable materials. Mergers, acquisitions, partnerships, and strategic alliances are becoming crucial for manufacturers to keep up with competition while balancing costs and finding ways to stand out.

There are also other areas in which automakers compete to stay ahead of the game, such as artificial intelligence, software, and advanced materials. Additionally, car-sharing and subscription models are changing the traditional way people own vehicles. More automakers are partnering with tech and telecom companies to offer more innovative in-vehicle experiences and connected services. These advancements are inherently linked to concerns regarding cybersecurity, infrastructure, and regulations.

Global Deal Activity

In North America, auto manufacturers have focused heavily on computer vision (CV) technologies. It’s all about enriching driver experiences and offering enhanced convenience via advanced connectivity, real-time data exchange, advanced user interfaces, and infotainment systems. Cybersecurity and data privacy are also significant areas of concern for manufacturers. Electric vehicle development is also a huge priority for North American OEMs in a highly competitive market.

In Europe, the focus is on connected mobility, safety, and sustainability. There are efforts to standardize connected tech, create 5G corridors across the European Union, and balance innovation with data privacy. Europe has also led the way in adopting electric vehicles due to stricter emission regulations and incentives.

In Asia, connected vehicles remain in the early stages but are garnering more focus. There is a need to adhere to local infrastructure limitations while delivering on consumer demands. This often requires partnerships between automakers and tech companies to improve connectivity and deal with the demands of densely populated cities and high-traffic communities.

M&A Outlook

The auto industry continually adapts to new technologies, such as autonomous vehicles, CV, electric vehicles, hybrid vehicles, and ride-sharing services. M&A strategies are staying on the pulse of CASE technologies.

Mergers and acquisitions will be necessary for auto manufacturers to continue to evolve their business models and adopt technologies that keep them competitive. M&A will also be needed for funding as banks tighten their lending strategies and tend to hesitate to give credit to automakers and manufacturers seeking to share the costs of developing new tech.

M&A also plays a large role for distressed component suppliers who need to secure supply chains, invest in technology and sustainability, and tap into key talent.

Suppliers in the automotive industry can successfully serve EV platforms if they change how they operate. They will need to operate more like an OEM that controls their supply chain and pursue strategies that give them more control over all production areas. EV platforms require newer engineering and manufacturing processes, so suppliers must deploy more capital to keep up with the changing landscape.

Ready to Move Forward?

Contact us at Benchmark International if you want to explore your M&A options and embark on the next chapter of your life. Our experts will work diligently to get you the maximum value for your company and to achieve solutions that fulfill your lifelong aspirations.

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