DETROIT, Mich.: A recently released automotive and components global report forecasts industry growth in Asia Pacific and the Middle East.
The report, compiled by the IMAP, a merger and acquisition (M&A) advisory firm, provides detail on M&A activity in the automotive industry, growth projections for 2010 and beyond, and commentary on the shift in leadership from the US to the Asia Pacific region.
Year-to-date, there have been 44 completed transactions announced in the automotive industry, accounting for nearly $2.9 billion in total transaction value. IMAP advisers closed six transactions in this industrial segment during the last 12 months, details of which were disclosed in the report:
IMAP says the the Asia Pacific region is quickly emerging as the next automobile production hub. In particular, China has been the front runner in the recovery of the automotive industry, doubling its automobile production from 2003 to 2008. This growth can be attributed to increased government emphasis on developing Chinese infrastructure, a decrease in retail taxes and an increase in vehicle subsidies in rural areas of China.
In addition to the Asia Pacific region, Eastern European countries such as Poland, the Czech Republic and Hungary are becoming favoured manufacturing destinations, having attracted foreign direct investment due to their proximity to Western Europe, low labour costs and a skilled workforce. Similarly, IMAP’s report indicates a majority of the automobile component production activities are concentrated in Japan, China, India and Thailand, because of the cheap raw materials and increasing demand for automotive products from the domestic market.
IMAP expects most of the growth will come from India and China, driven by rising populations, an increase in per capita income and improving infrastructure.
IMAP’s advisers also forecast the hybrid vehicle market will experience strong growth, as government support for environmental legislation continues to rise. Additionally, there will be more remanufactured products, lithium ion-batteries and low cost, no-frill vehicles.
IMAP announced five of its six completed automotive industry transactions to-date in 2009, including:
• Automotive tool supplier, Talhin/T (Canada), a subsidiary of ARRK (Japan), which was acquired by automotive metal fabrication and supplier, Revstone (US).
• Automotive parts remanufacturer, Remaco Group, LLC (US), which acquired the shares of automotive parts remanufacturer, MD Rebuilt Parts Detzen GmbH (Germany).
• Automotive roll former, Wagon Wixom, the U.S. subsidiary of Wagon, PLC (UK), which acquired the assets of roll former of metal parts, Modineer (US).
• Automotive tier one supplier, Antolin Group Automotive (Spain), which acquired 40 percent JV ownership interest in automotive interior trimming components manufacturer, Gong Zhu Lin Automotive Components Co., Ltd. (China).
• High-precision automotive engineer, Wild Manufacturing Group, Ltd. (UK), which acquired the shares of an undisclosed press parts manufacturer for the automotive industry (Hungary).
Visit www.imap.com for the Automotive and Components Global Report.
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