Auto Supplier Mergers: Fewer but Larger

Merger and acquisition activity among auto suppliers will drop 25% to about 180 deals worldwide this year, according to PricewaterhouseCooper LLP.

But this year's PwC Consolidation in the Global Automotive Supply Industry study says the size of each deal will grow, hiking the combined value of this year's deals to about $14 billion. That's up from $11 billion in 2012, $10 billion in 2011 and only $4 billion in 2010.

For the third consecutive year, North American suppliers are the most likely to be making M&A deals, according to the report. PwC says half the transactions this year will involve power and chassis systems.

The study forecasts that global vehicle production will reach 81 million units this year and grow 4% annually to 100 million in as little as four years. PwC expects the European auto industry's recovery to begin in 2015.