GCG’s Q4 2022 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:
- The broader U.S. equity market saw continued decreases in Q4 2022 as consistent Federal Reserve rate increases created increasing caution and uncertainty in the market. Sustained inflationary pressures continue to pose a challenge across the entire Automotive sector, with companies battling rising input and material costs coupled with supply chain disruptions.
- Based on a selected group of Automotive companies across multiple sub-sectors, the industry experienced an average increase of 12.2% in share price over the latest 3-month period. Automotive Manufacturers continue to fight for market share in the ever-expanding electrical vehicle market, which should provide significant tailwinds for the industry in future periods.
- In Q4 2022, middle-market M&A activity within the Automotive sector saw a substantial decline in transaction volume compared to Q3 2022, continuing the industry’s downward trend. Q4 2022 deal volume saw a dramatic decrease compared to Q4 2021, forecasting a weaker year in the middle-market M&A space for 2023.
- Automotive Retail continued to remain the most active sector, accounting for 64.9% of total Automotive transaction volume. Auto Parts & Equipment showed slightly decreased sector strength, recording 16.0% of Automotive transaction volume in Q4.
Click here for the full update.