OREANDA-NEWS. May 25, 2011. In 2010, 521 deals were closed globally with a total disclosed value of USD 29.4 billion, reported the press-centre of PwC.

Europe accounts for nearly 50% of global 2010 auto M&A deals.

Asia steals lionshare of deal value - USD 11bn in 2010.

Sector sees return to growth after lean recession period

27 million more light vehicles to be manufactured globally by 2017 from 2011.

The automotive merger and acquisition (M&A) market is set to soar this year following a bumpy recession-driven 2009 and 2010 but competition to stay at the top will be ‘brutally competitive’.

Automotive mergers and acquisitions (M&A) activity in 2010 was driven by strategic buyers focused on strengthening business units following the global financial crisis, according to a new PwC publication Automotive M&A Insights: Driving Value.

While global automotive deal volumes remained steady, disclosed deal value declined to its lowest levels in five years. Limited access to capital, strained financial positions, and heightened sensitivity to risk led strategic buyers to focus on smaller deals. On the financial buyer side, while there was significant interest in the automotive sector, fewer deals materialized in 2010.

Paul Elie, automotive transaction services leader, PwC USA, said:
"Globalisation is a motivating factor behind recent and pending transactions. Automotive companies are investing in strategic deals aimed at broadening their geographic footprint and/or strengthening their technology portfolio, enhancing their ability to compete globally."

Compared to the overall global trends, both Asia and Europe observed significant increases in deal activity and value. In 2010, Asia's disclosed deal value more than quadrupled to USD 11 billion from 2009 levels due to a few large vehicle manufacturer transactions.  While the North American automotive industry focused on its rightsizing and turnaround efforts, the European automotive industry was very active in the global deal market for the second consecutive year, accounting for 46 percent of global automotive M&A activity by volume and 41 percent of global disclosed value.

Stanley Root, Partner and Automotive Industry Leader at PwC Russia, comments:
“The trend appears to show that M&A activity will continue to increase not just for 2011, but at least for the next few years.  As companies plan for the future we can expect their strategies to follow a path for growth and success instead of a recession led hand-to-mouth approach. More firms will also seek to acquire new technologies and develop critical competencies to stay competitive.”