We are launching our new M&A report, this time in the Automotive sector. Albia has extensive experience in corporate transactions in the Automotive sector throughout its more than 20 years of experience.

Within the report that you can download here , we highlight the following data:

• The tariffs add an additional layer of complexity to the automotive industry that was already facing an inflection period conditioned by environmental regulations, the irruption of Asian vehicles and the contraction of demand.

 

 

• A general slowdown is observed in the West, where in the coming months it will have to face important decisions such as the imposition of tariffs on Chinese vehicles, or countermeasures to the protectionist economy of the new US administration. Also, various electoral processes in the eurozone with adjustments in automotive employment in the background.

 

• European OEMs sell new vehicles that are more expensive than Chinese ones due to higher production costs in Europe and subsidies from the Chinese government. As a result, consumers are opting for cheaper alternatives, leaving electric vehicles in Europe without the demand needed to achieve economies of scale. This fact is reflected in a penalty in the quotations of European OEMs.

 

• The European automotive industry is facing a scenario of uncertainty, having made and/or committed large investments related to the transition to electricity production. This delay would mean a new scenario, with an additional extension of the current models due to the lack of reaction time and limiting the capacity for innovation, unlike Tesla and Asian OEMs.

 

• The drop in production has had a direct impact on the supply chain. Likewise, the extensions of current models have caused a decrease in price, being forced to constantly renegotiate with the OEM in order to absorb cost increases and guarantee supply. Tier-1 companies with greater exposure to Europe are the main victims of this context, impacting their share prices

 

• Component manufacturers, usually closely linked to certain technologies, geographies and/or OEMs, have found in M&A a way to meet their growth demands that allows them to diversify and obtain economies of scale and also as a way to have production units that allow them to reduce their exposure to certain markets (divestments of production plants or carve-outs).