Carmakers rev their M&A engines

In the face of two paramount risks, automakers are printing an unprecedented number of tech deals. The expansion of ride-hailing apps threatens to shrink their market, while nascent automated driving technologies could provide an opening for tech giants such as Google and Apple to drift into their lane. Car companies have bought their way into both segments, although more so into ride-hailing as it's the more mature of the two.

According to 451 Research's M&A KnowledgeBase, the largest auto manufacturers have inked seven tech transactions since January, not far behind the nine in all of 2016 and much more than the sparse activity in prior years. About three-quarters of their deals have been in car-sharing and autonomous vehicle (AV) technology. Daimler, the most active among its peers this year, has pursued international expansion of its ride-hailing subsidiary, MyTaxi, through two acquisitions – Romania's Clever Taxi and Greece's Taxibeat. Audi inked a similar transaction this year with its purchase of mobile car rental service Silvercar. Ford Motor and Renault have also made similar acquisitions, while GM invested in Lyft last year.

While the ride-hailing market is well underway, fully-autonomous vehicles are a ways off. 451 Research predicts that there will be fewer than one million self-driving cars on the road until 2022. Still, one-quarter of carmakers' tech purchases have been for AV technology, according to the M&A KnowledgeBase. Ford's pickup in February of Argo AI for undisclosed terms was followed by an announcement that it will invest $1bn in the target over the next five years. Toyota, GM, Renault and Daimler (which is also partnering with Uber on AV technology) have printed acquisitions here, as well.

Although carmakers are spreading their bets across these two trends, those investments aren't unrelated. Owning ride-hailing and rental apps enables them to collect a new source of revenue and gather valuable mapping, traffic and driving data that they'll need to power self-driving cars. They also believe that ride-hailing services will be major consumers of automated vehicles when those finally hit the road.

For more real-time information on tech M&A, follow us on Twitter @451TechMnA.

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