M&A Activity in Automotive and Mobility Set to Surge in 2024/25

Reflecting on the past few years, it's clear that M&A activity will be robust in 2024 within the Automotive and Mobility sectors. In 2022, the focus was on speed as numerous original equipment manufacturers (OEMs) formed joint ventures and alliances to accelerate progress in four key areas, commonly referred to as ACES: Autonomy, Connectivity and digitization of vehicles, Electrification of powertrains, and Shared mobility.

The number of deals decreased in 2023 due to ongoing macroeconomic and geopolitical uncertainties, as well as the U.S. United Auto Workers (UAW) strike. Despite these hurdles, companies across the automotive and mobility value chain have come to recognize a new reality: M&A is now a critical strategic tool for business growth. Companies that fail to engage in strategic M&A activities may struggle to thrive in this evolving landscape.

In 2024, anticipate a surge of deals in the following areas:

Internet Commerce & Content: This area encompasses digital platforms and services for buying, selling, and distributing automotive products and content online, including e-commerce sites, digital marketing, and online customer engagement tools.

Embedded Software & Systems: This focuses on the development and integration of software and systems directly embedded in vehicles, enabling advanced functionalities such as infotainment, navigation, and vehicle-to-everything (V2X) communication.

Enterprise Applications: These involve software solutions that streamline and enhance various business operations within the automotive industry, such as supply chain management, customer relationship management, and enterprise resource planning.

Mobility & Fleet Management: This involves technologies and services that optimize the operation and management of vehicle fleets, including ride-sharing platforms, logistics solutions, and telematics for real-time vehicle tracking and maintenance.

EV Infrastructure: This area covers the development and deployment of essential infrastructure for electric vehicles, including charging stations, battery swapping facilities, and grid integration solutions to support the growing EV market.

If you own an automotive-related company in any of these categories, you can likely expect unsolicited acquisition offers. However, to achieve the best outcome, it’s essential to create a competitive environment with multiple bidders. Remember, a single offer is often not sufficient to secure the best deal.