Last year, Daimler, BMW and Volkswagen invested millions in digital companies, as a study shows. That harbors dangers, industry observers warn.
The German automobile manufacturers (OEMs) and suppliers strongly rely on digitization and new business models – and buy new company shares instead of building up digital know-how in-house.
This is the conclusion of a recent study by the Berylls Strategy Advisors. For the investigation, the Munich based consultancy has evaluated around 250 mergers and acquisitions of the automotive world within Germany, Austria and Switzerland.
In 2017, the three major car manufacturers Daimler, BMW and Volkswagen spent a total of 132 million euros on companies from the “Mobility Operations” business segment, another 91 million for engineering service providers and software specialists. In addition, they finance startups through their own venture capital funds.
According to Berylls, Daimler is a leader in the acquisition of digital companies and “invested along the entire mobility value chain.” Last year, Stuttgart made acquisitions of around 650 million euros in these areas – more than any other German carmaker. states in the study.
Most of the money went into AutoGravity, a comparison platform for buying and financing cars, followed by investment in the US charging network ChargePoint and the French car rental agency Chauffeur Privée.
German carmakers set different priorities
According to the survey, however, BMW’s acquisitions focused on electromobility and automated driving. Among other things, the Munich automaker participated with GM and Toyota in Nauto, a US startup that wants to make road safety safer with artificial intelligence. In addition, iVentures gave the US e-bus manufacturer Proterra in the summer of this year a cash injection, the exact amount was not mentioned.
According to the Berylls study, Volkswagen invested most of its money in mobility operations, in particular in its own subsidiary Moia.
The Volkswagen brand Audi also took over the car rental startup Silvercars. On the assumption of the robotaxis and autonomous driving specialized US company Auroa failed the Wolfsburg against it, a co-operation exists however further.
However, according to Berylls, OEMs play only a minor role in the merger and acquisition business. Overall, they only have a share of eight percent in the market. The largest group of buyers, 38 percent, are automotive suppliers.
The three major German players Continental, Bosch and ZF acquired a total of nine e-mobility, autonomous driving and digital business models in 2017, including IT security, big data analytics, lidar technology and satellite positioning services.
Is the market overheating?
The number of corporate takeovers in the mobility sector will continue to increase in 2018 and 2019, predicts Berylls. “The liquid funds of potential buyers are high and the financing costs are still very low
And the pressure to grow is still strong, especially among suppliers, “comments Jan Dannenberg, Partner at Berylls Strategy Advisors. He adds: “Demand for attractive takeover candidates – not just in the digital world – is significantly higher than supply.”
He expects prices to rise further. At the same time, he warns that the market may overheat: OEMs and suppliers in particular are hungry for innovation, “but (…) they often do not find the sophisticated solutions and business models they desperately need, the pace of innovation that the tech industry dictates to be able to keep. “So they would continue to hunt – and continue to buy.
Also published on Medium.