Study: Strong auto supplier M&A market through 2012

Dustin Walsh

Published: September 26, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions, Automotive

DETROIT (Sept. 26, 11:45 a.m. ET) — Merger and acquisition activity in the automotive supply base is expected to remain heated through 2012, according to PricewaterhouseCoopers LLP’s annual study of the supply chain.

PwC predicts about 270 global auto supplier deals in 2012 with a projected total value of $16 billion — similar to the 262 deals worth $16 billion in 2006.

There were 303 global auto supplier M&A deals in 2011 but at a value of only $10 billion.

The study, “Consolidation in the Global Automotive Supply Industry 2012,” says global automotive production is predicted to rise 40 percent by 2017, creating a buyer’s market for the supply base.

European automotive suppliers remain the biggest targets for M&A activity as the continent’s economy continues to stumble, the PwC study said.

“During the last 12 months, global auto suppliers, particularly from North America and China, have been targeting European competitors, predominately in powertrain subsystems,” Dietmar Ostermann, PwC’s global automotive advisory leader, said in a statement. “Auto executives should take a harder look at how the industry will continue to change, as leading suppliers will be expected to support global (automaker) platforms and participate in China’s large and continuously growing auto market, by serving both global (joint venture automakers) and domestic Chinese automakers.”

M&A activity among powertrain suppliers leads all supplier technologies this year, representing 26 percent of all deals globally. Powertrain represents 56 percent of all deals by Chinese companies for the year to date.

Of the 350 global powertrain suppliers covered in the study, 60 are “strong buyers” and 55 “strong divestors and distressed candidates,” according to the study.

Chassis suppliers rank second in PwC’s study with 314 global suppliers, 60 of which are strong buyers and 42 strong divestors.

The study also found that North American, European, Japanese and South Korean suppliers have not returned to pre-recession capital investment — the amount a company spends on fixed or other assets for future gain. Capital investment as a percentage of sales was 4.1 percent in 2011 for PwC’s top global 100 suppliers, compared with 5.1 percent in 2008.

Comparatively, for Chinese suppliers, capital investment spending as a percentage of revenue was 7.1 percent in 2011.


Comments

Study: Strong auto supplier M&A market through 2012

Dustin Walsh

Published: September 26, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Optical disc molder OEM getting into micromolding with acquisition of CDA

August 29, 2014 11:24 am ET

Optical disc replicator and molder Optical Experts Manufacturing Inc. of Charlotte, N.C., has expanded its core business and entered new high...    More

Polish injection molder Teknorubber up for sale

August 29, 2014 9:14 am ET

Polish plastic parts maker Teknorubber has been put up for sale following its insolvency filing in March 2014. The company is to be auctioned through ...    More

Image

Concours adding equipment as mold making business booms in Mexico

August 28, 2014 2:05 pm ET

Concours Mold Inc. is heading for a 50 percent increase in sales in Mexico this year after a $4 million upgrade of its plant in Huejotzingo, in the...    More

Image

Canadian mold maker Thibault adding to new operation in Mexico

August 27, 2014 3:19 pm ET

Canadian mold maker I Thibault Inc has purchased an established Mexican company, Tecnimoldes SA de CV, for a seven-figure-dollar-sum and renamed it...    More

Image

Megadyne buying Belt Corp. of America

August 26, 2014 10:35 am ET

In a move aimed at building its specialty belting manufacturing and fabrication operations, Jason Industrial Inc. — Megadyne SpA's wholly owned ...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events