The Autoparts industry activity is fundamental for economic value in the car making and aftermarket chain. Due to the excess of liquidity in the market, investors seek to increase their international presence. Currently this industry is very attractive, this is thanks to several reasons such as:
- Increasing average age of the vehicles. In USA and Europe, the average age of vehicles is around 11 years, a trend that has been increasing.
- Decreasing trend in the passenger car sales for EU and USA. This makes the automotive aftermarket stronger and might be caused by a change in consumer habits.
- Regulations. Original Equipment Manufacturers (OEMs) cannot prevent their suppliers to distribute their products as spare parts to independent distributors.
- E-commerce growth. Accessibility and a more widespread use of electronic platforms to make purchases of car parts.
M&A in the Autoparts Industry
During 2018 and 2019 the number of closed deals in the autoparts industry activity has decreased, however, it is expected to upsurge in niches during 2020. The deal count for this industry has behaved the same as the global M&A activity. But as expressed before, because of the already explained drivers, the deal count resistance is expected to shift into a growth pattern.
Even though the global automotive industry is entering a new cycle of decreased activity, we expect a resistance inside the automotive components niches that are engaged in innovative solutions. This includes autonomous driving systems, LED lighting solutions and electrical applications.
The Autoparts industry activity is always in a continuous transformation process. By 2030, it will be electrified, autonomous, shared, connected and yearly updated.
- 40% of the mileage driven in Europe could be covered by autonomous vehicles in 2030.
- Mobility habits will change. By 2030, more than one in three kilometres driven could involve sharing concepts.
- Due to rising population figures and mobility demands, vehicle age will continue to increase. It could rise by 23% by 2030 in Europe, 24% in the US and 183% in China.
- By 2030 it is expected that Europe’s vehicle selling inventory will reduce from 280 million to 200 million vehicles.
- This symbolizes a decrease of over 25%. For the US it would be of 22%, and 50% for China. However, vehicle age should be raising
- Autonomous driving and electrification will have a mutual impact. By 2030, more than 55% of new cars will be fully electrified.
Redistribution of R&D Investment
- Companies that invest 25% of their R&D Budget in software applications are rewarded with strong growth.
- Between 2020 and 2025, manufacturers and suppliers will be battling against sinking margins while at the same time they will have to invest heavily in customer-orientated innovations.
- New breed of auto components.
Does your business play an important role in the Autopart Industry?
The autoparts industry activity is expected to grow and change in the following years. If your business is inside this sector it might be the perfect time to consider selling your company. On the other hand, if you are interested in expanding your business, investing on the autopart industry could be the smartest choice. Either way, don’t hesitate to contact one of our specialized advisors to get more information.