2017 was a strong year for the automotive sector and related M&A activity, and we’re looking to generally continue that momentum in the year ahead. The new automotive ecosystem, in which traditional OEMs and automotive suppliers collaborate and integrate with established and emerging technology companies, continues to mature in many ways. Buyers across these sectors are leveraging strong balance sheets, relatively low borrowing costs and eager outside investors in order to participate in the race towards the development and full-scale market adoption of autonomous and connected vehicles.
Below are our top forecasts for 2018 that will affect the automotive M&A landscape:
Although there are various technological, legal and consumer-driven hurdles on the horizon, demands and evolutions in each of these spaces should drive deal activity and valuations in 2018 and beyond. There may be disagreements about the realistic timeframe for achieving full (Level 5) vehicle autonomy, but there is a clear consensus that the journey may be lucrative for those who can keep up. Staying on the sidelines is not a long-term option.
For more on this and other trending topics in the automotive industry, click here to download Foley’s white paper, Top Legal Issues Facing the Automotive Industry in 2018.