The auto industry's rush to develop self-driving vehicles, connected cars and electric vehicles has goaded suppliers into a feeding frenzy of acquisitions.
This year, suppliers are expected to complete a record $57 billion worth of acquisitions, nearly double the value of deals in 2016, according to a study by PricewaterhouseCoopers. The consulting firm added up 203 acquisitions that either closed or are expected to close this year, up from 166 in 2016.
Deal makers were motivated by self-driving vehicles, connected cars and fuel economy, said Dietmar Ostermann, leader of PwC's automotive advisory team and co-author of the report.
Those three areas "are driving a lot of this," Ostermann said. "Suppliers are trying to find out what it really means for them and to what degree they need to change."
The study included all acquisitions completed for the year to date as well as deals expected to be finalized in 2017. Several trends emerged:
- Chinese buyers initiated 17 percent of the deals, a sign they are globalizing their operations.
- The big money is in electronics, which generated 36 percent of aggregate deal value.
- Consumer electronics giants such as Intel Corp. and Samsung are making major acquisitions in a bid to establish an automotive presence.
- North American suppliers were the likeliest buyers—and also financially strongest, followed by Chinese vendors. Brazilian suppliers were the most distressed, and European vendors were the most likely acquisition targets.