Automotive Update: Second Quarter 2010
Deloitte Corporate Finance LLC
This quarter’s Automotive Update, produced by Deloitte Corporate Finance LLC (DCF), summarizes the most recent transactions along with information on the most active buyers, current transaction valuation multiples and an overview of the public market’s perception of the industry.
This quarter’s highlights include:
- According to J.D. Power and Associates, almost 3.1 million vehicles were produced in North America in Q2 2010, representing a 5% increase over Q1 2010 and a dramatic 69% increase over Q2 2009. However, production in Q3 2010 is forecasted to decrease 9% from Q2 2010 levels to 2.8 million vehicles.
- Year-to-date, automotive transaction multiples have averaged 7.5x unadjusted EBITDA, a significant increase from 4.7x in 2008 and 7.0x in 2009. Over the same period, deal volumes have remained fairly consistent, with 512 deals announced over the past twelve months, compared to 498 in 2009 and 522 in 2008.
- M&A activity in the automotive sector is anticipated to rebound, as industry consolidation will be driven by global suppliers that will look to acquire advanced technologies to grow their customer portfolio, improve operating margins and access new customers across global markets.
Download the Automotive Update below.