GCG’s Q2 2021 Automotive Industry Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples, and the state of the middle-market M&A environment.
Key findings include the following:
- Automotive stocks have seen varying results depending on their sub-sector. Auto Manufacturing stocks have greatly outperformed the market as they have been able to offset rising input costs with a strong sales price/mix during the last quarter. Automotive Dealers and Service Providers have also remained strong, while OEM Suppliers, both Domestic and Foreign, have struggled to keep up with the overall market. Automotive M&A deal volume remained steady during the 2nd quarter, while M&A deal value recorded a large increase from the previous quarter. Q2 2021 recorded the highest deal value of any quarter over the past year despite not seeing a large uptick in transaction volume.
- At the end of Q2 2021, publicly-traded automotive multiples were down slightly compared to the previous 12 months. Trading multiples varied significantly across and within the four categories with the strongest multiples observed in the Auto Manufacturing segment, a trend that has continued for the past few quarters.
- Automotive Retail is the biggest driver of M&A activity in the middle-market Automotive segment. This segment made up 62.5% of all deals completed in the 2nd quarter.
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