Customers demand new and expensive features and regulators require strict adherence to environmental and safety regulations; the  sector is under constant pressure. Significant technology companies with deep finances are increasingly investing in mobility business models, putting OEM dominance in jeopardy. There are also significant political, social, and financial issues, such as the current uncertainty surrounding Brexit, ongoing trade disputes between the United States and China, and COVID-19’s direct impact on world supply and demand.

Market View

  • In recent years, the more proactive automotive OEMs, parts suppliers, dealerships and wider service providers have increasingly turned to M&A as a strategic tool to prepare their businesses for a dramatically different future.
  • M&A deals that speed up digital transformation are likely to be more expensive. These include solutions that assist firms exploit low-touch, digital go-to-market channels or boost operational efficiency through automation. New value-added income stream enablers are expected to command a premium as well.
  • Innovative technology that assist businesses in staying on top of industry trends, laws, and environmental, social, and governance (ESG) responsibilities. Batteries, driverless vehicles, additive manufacturing, next-generation materials, production with non-fossil energy sources, and systems to monitor and report ESG performance are among the technologies.
  • OEMs will continue to make acquisitions and invest in their supply chains in order to strengthen and construct more resilient supply chains.

Market Outlook

Greater consolidation expected

M&A focus is on OEMs and suppliers

Greater innovation, transformation and investment in EV and autonomous vehicles

Supply chain constraints due to microchip shortages from the pandemic.