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Trending Up: Lean and Mean Portfolios
The first half of 2025 saw many automotive companies narrowing their scope to adopt a more efficient approach to dealmaking. Instead of chasing every growth opportunity, companies are shedding non-core assets and leaning into technologies they see as essential to their long-term strategy.
The result: more carve-outs of non-core assets and more targeted acquisitions. For example, suppliers are doing deals in ADAS, interiors, and powertrain designed to align with shifting OEM needs. Going forward, expect more moves that favor depth over breadth.
Trending Down: Deals on Hold, Not Off the Table
When we launched our Automotive Trends Report in January, respondents expected 2025 to bring a strong rebound in deal activity. That hasn't happened—at least not yet.
Uncertainty about consumers' continued adoption of electric vehicles, shifting emissions rules, and questions around global tariffs have made deals harder to negotiate. Private equity firms, in particular, are holding back, citing a lack of clarity on rates and valuations.
The result may not be a complete stop, but it is a slowdown. Buyers are still circling, but more deals are stalling in diligence or waiting for better conditions. The capital is there, and so are the targets. What's missing is the green light.
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