Kearney: Reduced overseas acquisition opportunities for auto parts

Abstract As the global auto market improves, the opportunities for Chinese companies to acquire automakers overseas are decreasing, and the window of opportunity for M&A components is also shrinking. Martin Habensack, global partner of consulting firm Kearney...

As the global auto market improves, the opportunities for Chinese companies to acquire automakers overseas are diminishing, and the window of opportunity for M&A components is also shrinking.

Dr. Martin Haubensak, global partner of consulting firm Kearney, made the above remarks in an interview with Caixin.

Hobsack believes that, as with the acquisition of the entire vehicle sector, as the global automotive industry picks up, overseas M&A opportunities in the auto parts sector are also decreasing, and competition is intensifying.

In the first quarter of 2010, auto companies such as Volkswagen and General Motors of the United States achieved a global sales growth of more than 20%, indicating that the global auto market has seen a marked improvement.

Kearney Director Dr. Dai Jiahui explained that on the one hand, large industrial investment foundations speed up the pace of acquisitions, and some companies with good technology prospects but temporarily facing financial difficulties will be their acquisition targets; on the other hand, some large global cars After the crisis, component companies will accelerate their acquisition of competitors.

Since 2009, Chinese auto companies have also launched a round of overseas mergers and acquisitions. BAIC Group acquired all the intellectual property rights of GM Saab, and Geely Group bought the entire shareholding of Volvo Car from Ford. In addition, SAIC, China's largest auto company, plans to cooperate with General Motors to jointly develop the Indian market.

Most auto industry players, including Xu Heyi, chairman of BAIC Group, believe that after 2010, as the global auto market improves, the opportunities for Chinese companies to acquire auto companies overseas will decrease, but the chances of acquiring parts companies will increase. The company can acquire the parts and components in due course.

“Opportunity does exist, but the window of mergers and acquisitions is shrinking.” Hobenberg said that Chinese automakers should pay more attention to the growth of local parts and components companies, because the competition in China’s domestic auto parts market will intensify in the future.

According to a recent survey by Kearney about more than 200 auto parts executives around the world, nearly two-thirds of respondents are optimistic about the development of the Chinese parts market and hope to increase investment in China.

Most of the surveyed executives believe that it is very important to build factories in China, not only for the Chinese domestic market, but also for exporting overseas markets. For companies that have already established factories in China, they believe that they can achieve their core products in China. Localization will become more and more important in the future competition.

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