Download - Merger and acquisitions in autobile sector
![Page 1: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/1.jpg)
Group 6Sameep Kunja 2011SMN6501Rajesh Sinha 2011SMN6502Anita Singh 2011SMN6504S Gayathri 2011SMN6509
Mer
gers
& A
cqui
sitio
n in
Au
tom
obile
Sec
tor
![Page 2: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/2.jpg)
Objectives & Methodology
Growth of auto sector with special reference to India
Study Major M & As in the auto sector
Analyze growth of auto sector and identify current and emerging issues in strategic management
Analyze major M & As, their outcomes and lessons learned
![Page 3: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/3.jpg)
IntroductionAuto industry one of the largest industries & key sectors of any economy
Growth registering a 30 % increase over the past decade
Sector consists of commercial vehicles, multi utility vehicles, passenger cars, two-wheelers, three-wheelers, tractors and related auto components
In the initial years, US dominated the automobile markets around the globe with no notable competitors.
However, after the end of the Second World War in 1945, the Automobile Industry of other technologically advanced nations such as Japan and certain European nations gained momentum
![Page 4: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/4.jpg)
International Production
(Source: http://oica.net)
![Page 5: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/5.jpg)
International Sales
Data Source: http://www.siamindia.com
![Page 6: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/6.jpg)
Top 10 Companies
ToyotaGeneral MotorsVolkswagenRenault-NissanHyundai-KiaFordHondaPeugeot-CitroënSuzuki-MarutiFIAT
![Page 7: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/7.jpg)
INDIAN PERSPECTIVE
![Page 8: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/8.jpg)
Indian Auto Sector - Sales
Data Source: http://www.siamindia.com
![Page 9: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/9.jpg)
Indian Auto Sector - Sales
Data Source: http://www.siamindia.com
![Page 10: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/10.jpg)
Indian Auto Sector - Production
Data Source: http://www.siamindia.com
![Page 11: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/11.jpg)
Indian Auto Sector - Exports
Data Source: http://www.siamindia.com
![Page 12: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/12.jpg)
Current Trends
Globalization is pushing auto majors To consolidateUpgrade technologyEnlarge product rangeAccess new markets Cut costs
Resorted to Common platformsModular assemblies Systems integration of component suppliers Ecommerce
![Page 13: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/13.jpg)
Emerging & Future Trends
![Page 14: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/14.jpg)
Reasons for M & As
Achieving Cost EfficienciesEngage new markets by global alliancesIndustry ConsolidationBolstering Core CompetenciesGeographic outlookDivesting non-core assetsNew Technologies
![Page 15: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/15.jpg)
Automobile M&A trends
![Page 16: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/16.jpg)
Automobile M&A trends
![Page 17: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/17.jpg)
![Page 18: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/18.jpg)
M & A Cases
Mazda in financial difficulties and beginning with 7 % in 1979 Ford acquires controlling interests with 33.4 % in 1997Joint projects save Mazda $90m/yearSince 2008, Ford has gradually reduced stake to 3%Remain strategic partners through JV and exchange technological information
![Page 19: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/19.jpg)
M & A Cases
Alliance due to financial problems of Renault and losing market share & under utilization of capacity of NissanPresent production – 4th in the worldJV Initiatives
Common platform for small carsReturn to Mexican marketExpansion in Europe & growth in Asia
![Page 20: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/20.jpg)
M & A Cases
Tata acquired Jaguar and Land-Rover from Ford in 2008 for $2.3bWide spread skepticism about Tata managing luxury brands & paying high priceTata gets JLRs manufacturing plants, advanced design centres & IPRTata gets recognition & credibility across the world
![Page 21: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/21.jpg)
CONCLUSIONCorporate acquisitions effective means to grow larger & competitive
Requires exacting strategic management & integration strategies & involves some risk
Suppliers using M&A to adjust to changing regulations in world market
Globalization has caused international active auto component manufacturers to shrink from 32 in 1980 to just 14 in 2007
Shifting customer behaviour calls for radical new approaches to future mobility
Issues becoming universal & are expected to converge by 2025
![Page 22: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/22.jpg)
CONCLUSIONProcurement, investment & personnel policy aligned with global benchmarks & list pruned to select few suppliers
Suppliers expected to deliver ever-more-complex systems at sites spread across the world
Major reasons for failure of M&As is lack of due diligence, clash of cultures & failure to integrate
Too many brands and capacity in Chinese auto market & could result in increased M&A activity in China. Chinese companies looking to acquisitions for new technologies and consumer markets
Companies seeking partners to spread costs and risks for developing next generation environment friendly cars
![Page 23: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/23.jpg)
References1.Ernst & Young Website, http://www.ey.com/GL/en/Industries/Automotive2. KPMG Website, http://www.qfinance.com/sector-profiles/automobiles3. PWC Website , http://www.pwc.com/gx/en/automotive/industry-publications-
andthought- leadership.html4. S. Ray, Assessing Corporate Financial Distress in Automobile Industry of India: An
Application of Altman’s Model, Research Journal of Finance and Accounting ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol 2, No 3, 2011 155
5. S. Ray, Economic performance of Indian automobile industry: an econometric appraisal, Business Intelligence Journal January 2012
6. J. Begley & T. Donnelly , The DaimlerChrysler Mitsubishi merger: a study in failure , Int. J. Automotive Technology and Management, Vol. 11, No. 1, 2011
7. T.J. Sturgeon, Global value chains in the automotive industry: an enhanced role for developing countries?, Int. J. Technological Learning, Innovation and Development, Vol. 4, Nos. 1/2/3, 2011 181
8. Kang, N. and S. Johansson (2000), “Cross-Border Mergers and Acquisitions: Their Role in Industrial Globalisation”, OECD Science, Technology and Industry Working Papers, 2000/01, OECD Publishing
![Page 24: Merger and acquisitions in autobile sector](https://reader035.vdocuments.us/reader035/viewer/2022081603/559028671a28abe2668b456d/html5/thumbnails/24.jpg)
References9. F.Becker-Ritterspach, GertBruche, Capability creation and
internationalization with business group embedded ness – the case of Tata Motors in passenger cars, European Management Journal (2012) 30, 232– 247
10. Development of the automotive sector in selected countries of the ESCAP REGION, Proceedings and country papers presented at the Regional Consultative Meeting on Promotion of Intraregional Trade and Economic Cooperation in the Automotive Sector.
11. N.H. Kang, S. Johansson, Technology and Industry Working Papers 2000/01, Cross-Border Mergers and Acquisitions: THEIR ROLE IN INDUSTRIAL GLOBALISATION, , OECD Science
12. http://www.oica.net13.http://www.automotiveworld.com/news/oems-and-markets/79140-
auto-industry mergers- bigger-is-not-always-better14.http://www.reportsure.com/automotive-reports/automotive-mergers
acquisitions. aspx15. http://www.qfinance.com/sector-profiles/automobiles