The Automotive, Transportation & Mobility sector is poised for M&A growth in the next twelve months, with nearly (62%) of respondents expecting increased deal activity. This optimism is largely driven by the need to strengthen supply chain resiliency, address labor shortages, and adapt to evolving market dynamics.

Key drivers of activity include:

• Supply Chain Resiliency: The pandemic-era disruptions and ongoing geopolitical tensions have underscored the importance of securing and localizing supply chains. Respondents cited consolidation of suppliers and strategic partnerships with technology providers as key strategies. One noted, “Infrastructure needs to be addressed. Once that happens, it will pave the future of automobiles.”
• Labor Challenges: Persistent labor shortages are prompting companies to seek operational efficiencies through M&A, including acquiring firms with stable workforces or automation capabilities. As one respondent shared, “Focus on operational efficiencies and cost reductions are key.”
• Technology Integration: There is growing interest in deals involving autonomous vehicle technologies and hybrid systems, reflecting a shift from pure EV investments to more diversified mobility solutions. “Consolidation and strategic partnerships around electronic and autonomous platforms” was cited as a key opportunity.

Automotive deal activity for the first half of 2025 was generally sluggish, with respondents reporting a more cautious and selective approach to dealmaking, with many delaying transactions due to economic uncertainty, interest rate volatility, and tariff concerns. As one respondent noted, “We’ve adjusted by focusing on high-synergy tuck-ins and ensuring transactions meet stricter return thresholds given higher interest rates and macro uncertainty.” 

Other notable sentiments include:

• “We have delayed M&A activity.”
• “Negatively impacted potential opportunities due to the uncertainty and channel disruption.”
• “We have been much more focused on fit.”

While optimism prevails, a minority of respondents flagged economic conditions, financing constraints, and geopolitical risks as potential impediments to deal activity in the next twelve months. Tariffs were also cited as a growing concern, influencing both deal structure and timing. Respondents also  noted smaller, strategic acquisitions over large-scale deals, focus on resilient, high-cash-flow targets, and placing a great emphasis on fit and operational alignment.