The automotive sector plays an essential role in the global economy, accounting for 5.7% of economic output and more than 7% of exported goods. In addition, the sector is the second-largest consumer of steel and aluminum among end-markets.
The global automotive supply chain is an interconnected ecosystem with production plants spread across different locations in Asia, Europe, North America, Latin America, the Middle East, and Africa.
The industry has been amid a technological revolution with the emergence of autonomous vehicle (AV) technology, electric vehicles (EVs), and hybrid propulsion technologies. This revolution has caused leading original equipment manufacturers (OEMs), such as GM and Volkswagen, to pour billions of dollars into the development of new technologies and automotive supply chain solutions to support their ultimate mainstream production.
The breakdown of traditional trade agreements and production policies has created obstacles for global trade. The pandemic has caused additional challenges, restricting global travel and the free flow of goods.
Reacting to these challenges, OEMs and suppliers have turned to creative solutions to solve their global and regional automotive supply chain challenges. Remedies being pursued include:
- Alternative sources for goods and services;
- Shortened supply chains; and
- Utilizing automotive M&A (mergers & acquisitions) and other investment banking strategies to control important aspects of the supply chain.
The analysis contained in this report explores the challenges and solutions in managing a global supply chain for the automotive industry and how M&A can be an important tool in a company’s arsenal to address these changes.
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