The rising global interest rates and risks associated with political uncertainties (in some regions) have delayed the spending and investments in mergers & acquisitions of leading businesses. However, the advent of autonomous vehicles and the desperation for its practical deployment is expected to change this scenario completely. Automotive OEMs and tier-1 suppliers are grabbing the investment opportunities along with acquisitions and partnership with tech giant/startup to adopt the emerging & disruptive technologies such as ADAS, driverless vehicle technology, connected vehicles, artificial intelligence, and ride sharing.
Automakers believe that the simplest and fastest way to adapt and develop the emerging technology is to acquire it. This strategy adoption in the industry has helped the tech suppliers to earn big profits. In September 2016, Renault-Nissan acquired Sylpheo, a French software development company for connected vehicle and mobility services. Toyota, GM and BMW in October 2016 invested in AI based self-driving startup Nauto. BMW, Audi and Daimler acquired HERE (digital mapping and navigation software provider) from Nokia for $3.1 billion in July 2015. Volkswagen invested $300 million in Gett, a car hailing startup and $180 million in Chinese AI start-up Mobvoi. Ford invested $1billion for five years in artificial intelligence software company, Agro AI in February 2017. General Motors acquired Cruise Automation, a software provider for $581 million; also invested $500 Mn in ride sharing company Lyft.
Not only OEMs but the technology companies are also adopting forward and backward integration strategy by acquiring established startups. For instance, Intel a chipmaker in March 2017 acquired Mobileye, an autonomous vehicle SoC supplier startup at an equity value of $15.3 billion. In December 2017, LG Electronics partnered with HERE Technologies (owned by a consortium of Audi, Mercedes, and BMW) to create a new platform for navigation systems and on-board sensors for autonomous vehicles. Samsung in March 2017 acquired Harman International Industries for $8 billion for dedicated supply of in-car entertainment, communication, infotainment, navigation and other automotive connectivity solutions. All these investments and acquisitions have captured attention of everyone providing a major benefit for future autonomous vehicle technology.