Europe was the most active autotech M&A market in 2018 with 39% of deal activity, ahead of North America and APAC, yet accounted for only 7% of total global M&A transaction value.
The latest research from GP Bullhound reveals M&A activity in autotech across Europe, Asia and North America has steadily increased in the last few years, reaching a record 166 transactions in 2018, up from 144 the previous year.
Though Europe is the most active market worldwide for M&A transactions, Asia Pacific and North America lead in terms of deal value – with 72% and 21%, respectively.
The total global autotech fundraising value increased by 293% to €27bn over the past five years,
Sven Raeymaekers, Partner at GP Bullhound, said: “Europe’s autotech sector has been growing from strength to strength in the last few years, and the figures in our report attest to significant innovation and investment across the continent. The next challenge for Europe’s autotech firms will be to achieve scale in order to compete with the biggest players in the industry. The difficulty so far is that European autotech companies struggle to get the same level of funding as their competitors in APAC and North America.”
The report also reveals that technology giants such as Google, Intel, Tesla and Uber are challenging established automotive firms when it comes to innovation in autonomous driving, connected cars, electric vehicles, and shared mobility solutions.
With Tesla on track to outsell both BMW and Mercedes-Benz in the US and several global automakers issuing recent profit warnings, GP Bullhound says the automotive industry is facing unprecedented disruption from emerging and established technology firms keen for a slice of the action.
Guillaume Bonneton, Partner at GP Bullhound, added: “A battle is emerging between global tech giants and the traditional automobile manufacturers. The tech giants have an advantage in terms of total resources available, but do not rule out the OEMs as they are pouring significant levels of investment into the four key sectors highlighted in our report. Combined with the existing levels of trust they have from consumers, it will be interesting to see who comes out on top.”
The report considers four key trends set to significantly reshape the automotive sector over the next ten to fifteen years: shared mobility, electrification, autonomy and connectivity.
Autonomy looks set to catch up to shared mobility as the most disruptive sector with the greatest increase in transaction value from €0.2bn in 2014, to €8bn in 2018 and an average transaction value of €70m, just below level of shared mobility on €75m which has dominated since 2014. This came as shared mobility declined from €17bn in 2017, to €8bn last year.
Looking ahead, the report identifies micro-mobility – bike, scooter and mopeds-sharing– as a fast-growth area, with deal activity in bike-scooter sharing increasing from $14m in 2015 to $3.5bn by the end of 2018.