13 June 2024
Translink Corporate Finance recently unveiled the latest M&A Automotive Insights Report FY 2023/24. The report explores the evolving dynamics of the automotive sector amidst market uncertainties and transformative shifts.
The report shows that in 2023, the automotive sector witnessed a decline in the number of transactions, totalling 875, representing a 19 per cent decrease compared to 2022.
The M&A activity in the automotive sector is driven by various factors, including market changes, disruptions, and industry consolidation.
Strategic buyers continue to drive M&A transactions, navigating through market uncertainties and seizing opportunities for growth and innovation.
Amongst ongoing market uncertainties, several positive trends emerged in 2023 including EV growth, supply chain improvements, technological advancements and sustainability focus.
The report offers insights into three industry sub-sectors – OEMs, components and dealers as well as looking at key factors that shaped the industry in 2023 – such as climate change, technology, and legislation.
Stuart Hands, Global Head of the Automotive Group and Translink Corporate Finance UK Partner, forecasts that global M&As will comprise of active, regional acquisitions of EV start-ups.
Stuart says: “Potential mergers for synergies will feature with strategic manoeuvring as companies battle for position in a rapidly transforming economy.
“I believe that the automotive M&A market will stay active, with consolidations driven by technological advancement, market expansion strategies, and the continued need for innovation.”
In response to a recent BBC News article discussing whether the move to electric vehicles is slowing down, Stuart has also shared his insights into how the decline could affect M&A activity in the automotive sector.
He said: “Protectionist policies may be adding to Automotive industry uncertainty in the West, resulting in consumers facing high prices and therefore slower adoption, especially with inflation and the cost-of-living crisis.
“These headwinds have a profound impact on M&A activity, and in the future we can anticipate an industry that is being redefined.”
With five decades of experience and a global network, Translink Corporate Finance advisers are the perfect partners to navigate the automotive landscape and get the deal done.
Read the full M&A Automotive Insights report, here: translinkcf.com/reports/ma-automotive-insights-report
