Looking for transactions to sustain and grow core revenues? Today’s automotive industry is characterised by globalisation, consolidation, and excess capacity across all segments of the supply chain from design and development to manufacture and sale. Automakers continue to look for economies of scale in the development of “platforms” to be utilised in multiple markets around the world. Suppliers must match a “world price” which is increasingly being set in emerging markets. And both OEMs and suppliers face global overcapacity with estimated utilisation rates below 80 percent globally.
As automotive companies race to increase utilisation and obtain competitive advantage they often look to mergers, acquisitions, and joint ventures. But in deal-making caution is always warranted: In most industries, the majority of deals fail to create shareholder wealth. There are multiple reasons for this including incompatible cultures, synergies that fail to materialise, inability to implement change in the new organisation, and a clash of management styles.
How PwC can help you
PricewaterhouseCoopers has developed a proven framework for increasing the value of automotive transactions. PwC’s automotive deal professionals can help companies:
- Develop regional strategies that focus on local markets and local customer preferences
- Conduct target and commercial due diligence
- Establish proprietary relationships with top targets
- Develop a risk management program associated with executing an aggressive M&A strategy
