M&A as an Enabler of Transition
Change ahead in automotive downstream
- This report focuses solely on the automotive downstream market, i.e. the sale and use phase of a car.
- Next to tremendous changes in the automotive downstream market environment, consumer demand for more flexibility in mobility as well as holistic and environmentally sustainable mobility concepts are gaining more importance.
- Therefore, market participants need to adapt and rethink their business models in order to strengthen their market position, diversify their revenue streams and create stronger customer relationships.
- M&A is a key instrument for both traditional automotive downstream players, to gain (digital) expertise and expand their footprint across the value chain, as well as new market participants, who are trying to gain scale, market share and international footprint quickly by leveraging their digital competencies.
- In 2021, the global M&A activity in the Automotive Downstream sector experienced an increase of 15% (by number of deals).
- The proportion of cross-border deals has increased from 36% in 2019 to 47% in H1 2022, underlining the trend of seeking international footprint.
- Deal activity is strongly driven by strategic buyers, with 65% of global M&A activity in 2021 involving a strategic buyer.
- We expect financial investor involvement to increase over the coming years, as younger companies develop towards attractive platforms for consolidation.
- Valuations range from <1x Sales for smaller traditional businesses up to ~8.0x Sales for established high-growth digital businesses.
“A high degree of innovation and shifting consumer demand pose a variety of challenges for traditional automotive downstream players while creating chances for disruptive new market entries. The fight for scale and market position has only just begun.”Peer Günther, Senior Advisor Automotive