Study: Battle for the future of the car is coming to a head
The report focuses on four key areas that, according to market observers at GP Bullhound, will significantly change the automotive sector over the next ten to fifteen years: Autonomous driving, e-mobility, shared mobility and connected cars. One result of the evaluation: Europe plays only a subordinate role with only 7 percent of the global M&A transaction volume – however, companies from Europe are responsible for more than a third (39 percent) of all worldwide transactions in the Autotech sector. In Europe, transactions are thus significantly smaller than on other continents.
It is also clear that M&A activities in Europe, Asia and North America have risen steadily in recent years and reached a record level in 2018 with 166 transactions – compared with 144 in the previous year. Although Europe is the world’s most active market for Autotech M&A transactions, the Asia-Pacific region and North America continue to lead the transaction volume with 72 percent and 21 percent respectively. The total value of global fundraising activities in the automotive tech sector rose by 293 percent over the last five years to 27 billion euros.
“The European autotech sector has grown stronger in recent years and the figures in our report show significant innovation and investment across the continent. The next challenge for European companies in the automotive technology sector is to continue to scale in order to remain competitive with major suppliers,” comments Sven Raeymaekers, Partner at GP Bullhound. This is made more difficult by the fact that European companies do not have as easy access to financing on the same scale as their competitors from APAC and North America.
The new report also shows how technology giants – including Google, Intel, Tesla and Uber – are increasingly challenging established automotive companies to innovate in autonomous driving, connected cars, electric vehicles and shared mobility solutions. In the USA, Tesla is well on the way to overtaking the two German flagship carmakers BMW and Mercedes-Benz in terms of sales figures.
“The battle between the global technology giants and the traditional automobile manufacturers has long since begun. One thing is clear: the big names in the tech scene have the advantage of being able to draw on much larger resources. Conversely, however, this does not mean that the classic manufacturers have already given in. On the contrary, they are investing heavily in the four key sectors highlighted in the report. Of course, they also benefit from the fact that consumers already trust them,” says Guillaume Bonneton, Partner at GP Bullhound. That is why the battle for the future of the automotive industry is far from over.
The figures in the report also suggest that autonomous driving of shared mobility is likely to compete in the race for the most important car technology sector in the future. This is indicated by the significantly increased transaction volume, which rose from 0.2 billion to 8 billion euros between 2014 and 2018. At the same time, the average transaction volume of EUR 70 million for autonomous driving last year was very close to that of shared mobility at EUR 75 million per transaction. In addition, investments in the shared mobility sector declined significantly, from a deal volume of EUR 17 billion in 2017 to EUR 8 billion in 2018.
GP Bullhound’s report also lists the world’s most active Autotech investors between 2014 and 2018. The basis is the number of deals. This shows that German companies in particular are particularly active: Bosch leads with 41 deals, BMW (29 deals) follows in third place, while Daimler comes in fifth with 26 transactions.
Looking to the future, the report identifies micromobility – with bicycles, scooters, and mopeds – as one of the market segments with the greatest growth potential. Investments in the shared scooter segment rose from 12.4 million euros in 2015 to 3.1 billion euros by the end of 2018.
The complete report “Autotech – the Mother of All Techn Battles” can be downloaded here.