Boosting financial growth
In 2022, automotive mergers and acquisition deals amounted to some 211 billion U.S. dollars worldwide, with the second quarter of 2022 representing a record-high deal value since 2017. This quarter recorded, among other deals, the acquisition of NorrVulk AB by Continental AG. A few years ago, in 2019, the Fiat Chrysler Automobiles NV and Peugeot SA merger was the largest deal recorded worldwide, at over 30.1 billion U.S. dollars. This value was over 20 billion U.S. dollars more than the second-largest automotive deal reported that year. With this merger, the newly created Stellantis secured its place among the five leading automakers worldwide and the 100 major global companies by revenue. The automotive manufacturer’s net income was at its highest in 2022, reaching nearly 16.78 billion euros (around 18.39 billion U.S. dollars based on June 27, 2023, exchange rates).Mergers and acquisitions have also been a strategy for growth in the overall transportation and logistics industry. In 2022, merger and acquisition transactions reached 181.3 billion U.S. dollars, under the 2021 deal value but around 27.04 percent above the values recorded in 2019, before the COVID-19 pandemic. Most of these deals were in logistics, trucking, and shipping.
Breaking into different markets
While car brand conglomeration can help automotive manufacturers boost their competitiveness in a dynamic global market, it can also be a way for automakers to diversify their vehicle range further. This is, for example, the case with the Toyota Motor Corporation, the parent company of the eponymous Toyota, Lexus, Daihatsu, and Hino Motors. This portfolio includes a small car brand, a luxury vehicle brand, and a commercial vehicle brand. In 2022, Toyota was the automotive brand with the highest market share, at 11.5 percent, compared to Volkswagen’s 6.7 percent. In 2022, Lexus was estimated to be the eleventh brand in the luxury market based on revenue. Meanwhile, the Mercedes-Benz Group, BMW Group, and Volkswagen Group—three other car brand conglomerates—topped the luxury ranking with their own luxury and non-luxury brands.Some car brand conglomerates have also added to their portfolio in order to enter the Chinese market. China is the largest passenger car market worldwide. Until 2022, foreign automakers needed to partner with Chinese companies to be able to manufacture vehicles in the country. This rule led to many joint ventures between foreign automotive manufacturers and Chinese companies, diversifying the portfolio of the large car brand corporations entering the Chinese market. Some of these joint ventures—particularly the FAW-Volkswagen Automotive Company and the SAIC General Motors Corporation—topped Chinese car sales.