Selling an Automotive Manufacturing Business

Most automotive manufacturing businesses are valued based on seller earnings and how resilient those earnings are under program changes and annual price-down pressure. Higher valuations usually go to suppliers with stable margins by part family, a clean history on customer returns and chargebacks, and clear visibility into which programs drive revenue. For a starting point, use the free valuation calculator, which uses real transaction multiples and lets you adjust for owner add-backs.

No. Brokers typically charge 5–10% of the sale price for work an informed owner can handle with the right process and tools. Rejigg gives you pre-vetted buyers, digital NDAs, a secure data room, direct messaging, and offer tracking, so you can run a tight sale process without paying a percentage. Start with the prepare-to-sell guide and list once your package is ready.

Most sales run 3–6 months from going live to closing, with 30–60 days of heavy diligence once a buyer is serious. Automotive can stretch longer when customers require change-of-control notice, when outside processing and cert trails need extra verification, or when the buyer’s lender gets cautious about working capital. Rejigg helps keep diligence moving with a structured due diligence and closing checklist and one secure data room.

Sometimes. SBA loans usually fit best when cash flow is steady, financials are clean, and program concentration can be explained clearly. Automotive suppliers can still qualify, but lenders tend to dig into customer dependence, margin volatility from scrap and premium freight, and big working capital swings tied to releases and work-in-process. You can model payments and scenarios with the SBA loan calculator before you negotiate terms.

Expect three years of profit and loss statements, a current year-to-date P&L, and a balance sheet that ties out. Buyers also ask for detail behind inventory and work-in-process, plus the drivers of overtime, premium freight, scrap, and rework, so they can judge how repeatable earnings are. If your books are in QuickBooks, Rejigg’s prep process pairs well with QuickBooks integration, so you are not rebuilding reports by hand.

Most deals assume the business transfers with a “normal” level of working capital, meaning enough inventory, work-in-process, and receivables to keep shipping. In automotive, normal can be higher than owners expect because releases, long-lead material buys, and outside processing queues inflate WIP. Agree on a target working capital number during negotiations so you do not get surprised at close. Rejigg’s deal tracking helps you compare offers side-by-side, including each buyer’s working capital approach.

Customer-owned tooling generally stays customer-owned, but buyers will want proof of location, condition, and the obligations tied to it. The practical risk is continuity. If tooling maintenance is behind or documentation is thin, you can end up in a dispute right when the new owner is trying to keep shipments steady. Build a tooling list tied to programs and store it in a controlled data room. Rejigg makes it easy to share tooling schedules and maintenance records under NDA.

Buyers want patterns, not just totals. Show trends over time and break out the top drivers by part family or program, plus the corrective actions you took and whether they worked. In automotive, premium freight and sorting can quietly erase profit, so separating those from normal shipping and labor helps the buyer see true operating performance. Keep the charts, chargeback detail, and examples in Rejigg’s data room so you are not scrambling mid-diligence.

A letter of intent is the buyer’s written outline of price and major terms before full diligence. The purchase agreement is the final legal contract you sign at the end. In automotive manufacturing, the letter of intent should also spell out working capital targets, how inventory will be valued, and any earnout or seller financing details, because those terms often move more money than people expect. Rejigg’s negotiation guide helps you lock key terms before diligence drags on.

An earnout pays you after closing if the business hits agreed targets. In automotive, earnouts often show up when program volume is uncertain, annual price-downs are still being negotiated, or the buyer is nervous about launch economics. If you agree to one, tie it to metrics you can measure cleanly from your normal reporting, and make sure the buyer cannot change the result by shifting expenses around. Rejigg’s offer comparison dashboard helps you compare a higher headline price to a structure you will actually collect.

A serious buyer will test whether the floor matches the story. They will look at traceability, travelers, gage calibration, WIP labeling, packaging, and whether inspection frequency matches the control plan you describe. They also watch how decisions get made, including whether supervisors run the day or everything routes back to the owner. Plan the tour path, set photo rules, and be ready to pull supporting documents right after. Rejigg helps you keep the follow-up requests in one organized thread.

The certification usually stays with the company, but buyers worry about continuity during an ownership change. If audit readiness, corrective actions, and customer responses depend on one person, both the registrar and customers can get uncomfortable fast. Prepare by showing stable quality leadership, recent audit outcomes, and clear day-to-day ownership of corrective actions. Keep those records in a secure data room, and only share them after NDAs are signed through Rejigg.

Buyers look for how binding the revenue really is. Blanket purchase orders and releases help planning, but buyers dig into cancellation terms, price change rights, warranty and chargeback exposure, and whether annual price-downs are baked into the relationship. They also ask how often engineering changes hit and who pays when scope increases. Rejigg’s data room lets you share contract templates and PO terms securely, with control over which buyer sees what.

Confidentiality comes down to controlling access and timing. Start with vetted buyers, require NDAs, and stage information so customer names, part numbers, and program details only show up once a buyer is real. Rejigg supports pre-vetted buyers and digital NDAs before access, plus a secure data room with permission controls. If a buyer pushes for customer calls early, treat it as a term to negotiate, not a standard step. You can always slow down or stop disclosure.

Taxes depend heavily on deal structure, especially whether you sell assets or equity and how the purchase price gets allocated across equipment, inventory, and goodwill. Automotive manufacturers often have meaningful machine and inventory value, so the allocation can change your after-tax proceeds by a lot. Bring a tax advisor in early enough to model outcomes before you accept an LOI. Rejigg’s deal tracking helps you keep offers organized so you can compare real proceeds, not just headline price.

Buyers focus on capability and reliability, not what you paid. They will look at uptime, maintenance history, constraint machines, and whether the equipment base supports the programs you are selling. Some deals use an appraisal, and others treat equipment as part of the overall price, especially when the real value is qualified processes and consistent output. A clean fixed asset list with age, condition, and constraint notes helps avoid last-minute retrades. Store the list and maintenance records in Rejigg’s data room.

A common transition is 3–12 months, and it usually depends on how much customer communication, quoting, and quality decision-making runs through the owner today. Automotive customers tend to care about responsiveness during change, especially if launches or active engineering changes are in play. The cleanest transitions are role-based, with named owners for estimating, quality, operations, and customer escalations before closing. Rejigg’s transition planning guide helps you plan the handoff.

Do not compare on price alone. Compare certainty and terms like working capital target, earnout rules, seller financing, diligence timeline, and what the buyer expects from you after close. In automotive, a “clean” offer often wins because it lowers the odds of a retrade when the buyer gets into backlog releases, scrap history, or program-level concentration. Rejigg’s deal tracking and offer comparison view shows terms side-by-side so you can pick the best outcome, not the flashiest number.