In Q1 2024, medium-sized automotive suppliers continued to face a number of challenges, including a shortage of skilled labour, refinancing costs and price increases.
Ongoing margin pressure on OEMs continues to lead to cost-cutting measures in procurement, affecting suppliers throughout the entire supply chain. Simultaneously, the transformation to electromobility remains an ongoing topic in the automotive industry.
The automotive M&A deal count significantly decreased from Q1 2023 to Q1 2024 with 116 and 86 transactions, respectively. The cumulative deal value decreased in Q1 2024 (€6.7bn) compared to Q1 2023 (€14.4bn). M&A activity in Q1 2024 was mainly driven by transactions in the areas of EV, interior & exterior and electrification solutions as well as by non-core divestments of large Tier-1s such as the sale of Webasto’s charging solution business and the divestment of voestalpine's metal stamping plant in Nagold, Germany.
The challenge and main task of the automotive industry continues to be to further mitigate the rise in costs by optimising the entire value chain.
Across Europe, an increase in valuation multiples from Q1 2024 compared to Q4 2023 was observed as EV/Sales, EV/EBITDA, and EV/EBIT multiples increased by 2.9%, 5.1% and 5.5% respectively. The North American market demonstrated a strong positive performance, with EV/Sales, EV/EBITDA, and EV/EBIT multiples increasing by 10.4%, 7.7%, and 8.6% in Q1 2024, respectively. In Asia, a similar trend was observed with EV/Sales, EV/EBITDA, and EV/EBIT multiples increasing by 14.8%, 12.8%, and 8.8%, respectively, compared to Q4 2023.
The challenge and main task of the automotive industry continues to be to further mitigate the rise in costs by optimising the entire value chain. Suppliers will have to allocate resources efficiently to compensate rising costs while simultaneously investing in research and development to adapt the product portfolio to the ongoing transition to alternative powertrain technologies. Existing development areas are expected to remain in place and may be addressed through strategic alliances and M&A.
Transactions
Not just numbers on a balance sheet, our transactions represent over 20 years’ commitment to our clients’ future. Helping them change the game. Even before it was ready to be changed.
Acquisition creates national leader in spare parts distribution and mobility services
Adviser to Reynasa on its sale to Mutua Madrileña
Leading Irish motor distributor and retailer sold to a global automotive group
Adviser to Cedar Automotive Group on its sale to Salvador Caetano Group
Strategic collaboration to secure and strengthen financial service offering to the Dutch mobility sector
Adviser to BOVAG on the transaction with a.s.r., including sale of Bovemij's insurance activities
Strategic acquisition strengthens European automotive platform
Adviser to Frauenthal on the sale of its automotive division to SteelCo
Insights
Through the lens of sector experts with decades of hands-on experience, our game-changing insights reveal things unseen by others; enhancing instead of replicating what you already know.
