Carve-outs in the automotive industry

2021-09 The automotive industry is constantly changing, facing external challenges posed around new technologies and business models. Carve-outs are under the spotlight to help companies mitigate these risks and offer strategic opportunities. Mazars experts around the world provide insights about carve-outs, from a range of different strategic perspectives.

Could carve-outs be a strategy for success in the automotive industry?

The automotive industry is in a state of flux, facing a powerful combination of external factors. These include increased competition, the rise of electric cars, regulatory changes and new forms of mobility, such autonomous driving and connected cars.

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The people factor – inform, involve, empower

Before a successful carve-out, there are structural and personnel issues that must be considered. Not least, key issues around change management and employment law.

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IT infrastructure – plan, do, check, act

Modern IT systems are usually standardised, harmonised, and optimised across business areas. Not only do they play a vital support function, but they also help to shape and link organisational units and business processes end-to-end through ever greater levels of digitisation and automation. As a result, the IT infrastructure will play a key role in a carve-out and it needs to be carefully planned, monitored and managed for the transformation to be successful.

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Valuations – accounting, taxes, and transaction prices make valuations a key aspect of the carve-out

In the course of a carve-out, valuation questions regularly have to be answered on several levels. These are partly dependent on the specific motivation of the project, and in all cases, GAAP and tax requirements must be met. Here, the company often has valuation options with potentially far-reaching consequences. Early planning of these aspects is therefore essential for a successful carve-out.

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