What are the main drivers of your company’s plannedacquisition activity in your chosen market/country? (respondents could select two)
67% of respondents said one of the primary purposes for making acquisitions is to gain share in new markets (products or geography).
Growth continues to remain important to the Barometer automotive panel with 50% citing growth as their primary focus compared with 55% six months prior.
Desire for growth continues
Production volume growth has slowed after the rapid rebound experienced following the Great Recession and companies are now beginning to shift their focus from capturing growth to ensuring stability. This represents a significant shift in sentiment compared with one and two years ago, when substantially more companies viewed growth as their top priority.
Which statement best describes your organization’s focus over the next 12 months?
Percentage of companies focused on growth
With US$7.8 trillion of cash on the balance sheets of the Global 1,0001, companies are deciding whether to return this cash to shareholders in the form of dividends or share buybacks, allocate it to value-creating investment opportunities or maintain cash reserves. In general, automotive respondents are more likely to channel their excess cash into organic growth opportunities (53%), rather than to pay down debt, make acquisitions or return the cash to their shareholders.
If you have excess cash, which of the following will be your focus over the next 12 months?
Growth in new and existing markets driving deal activity
Sixty-seven percent of respondents said one of the primary purposes for making acquisitions is to gain share in new markets (products or geography). Second, to entering new markets, is increasing share in existing markets (52%).
1 Source: S&P Capital IQ, 11 April 2012