Ernst & Young Present Automotive Sector Analysis


Ernest & Young - March 5, 2013

In their lat­est assess­ment of the global auto­mo­tive sec­tor, Ernst & Young’s “Auto­mo­tive Cap­i­tal Con­fi­dence Barom­e­ter” gives insight into global eco­nomic factors.

Find out more about what auto­mo­tive com­pa­nies plan over the next 12 months.

Com­pa­nies in the global auto­mo­tive sec­tor are back­ing away from big M&A deals and focus­ing on such fun­da­men­tals as cost con­trol, risk man­age­ment and cap­i­tal allo­ca­tion, accord­ing to the lat­est Ernst & Young Auto­mo­tive Cap­i­tal Con­fi­dence Barometer.

Jim Carter, Ernst & Young’s Amer­i­cas Auto­mo­tive Trans­ac­tion Advi­sory Leader, notes that 61% of respon­dents expect the global econ­omy to remain soft for at least a year. Only 16% pre­dict their com­pa­nies will make an acqui­si­tion in the next 12 months-less than half the pro­por­tion a year ago. Carter says Ger­many and the U.S. have replaced China and India as the most attrac­tive regions for invest­ment, mainly because of their rel­a­tive eco­nomic stability.

Gen­eral sur­vey high­lights include:

  • 87% feel the global econ­omy is sta­ble or improving
  • 92% expect to main­tain or increase their work­force over the next 12 months
  • 23% plan to refi­nance loans or debt oblig­a­tions in the next 12 months
  • 22% expect to make an acqui­si­tion in the next 12 months
  • 25% see divest­ments as likely in their orga­ni­za­tion over the next 12 months
  • 50% indi­cate growth as their company’s pri­mary focus over the next 12 months