With restructuring efforts now largely in the rear view mirror and sales strong, auto manufacturers and suppliers are ready to turn their attention to consolidation.

After a gut-wrenching two-year period marked by bankruptcies, plant closures and government bailouts, things are finally looking up for auto companies. U.S. auto sales were up 11% in December compared to a year prior to a seasonally adjusted annual rate of 12.6 million vehicles sold, the highest rate in more than a year, while sales in emerging markets such as India and China remain strong.

There are still significant challenges on the horizon, but the remaining problems appear better addressed by dealmaking than by the bankruptcy court. Automakers are being asked by consumers and governments to commit billions of dollars to develop new powertrains and upgraded vehicle electronics and software, and seem to believe the best way to fund all of that research and development is with the help of partners.

Indeed, nearly two-thirds of respondents to a just-released KPMG LLP survey predicted an uptick in mergers, acquisitions and alliances among auto manufacturers in the next five years, and 62% predicted top-tier suppliers would be coming together as well.

The survey, which polled more than 200 senior auto execs worldwide, found respondents more focused on accessing new technologies and markets and diversifying their product lines than they are on extracting synergies.

The managers overwhelmingly said they expect manufacturers to increase investment on new products, powertrains and improved safety in the next two years, while also working to modernize their manufacturing base.

Gary Silberg, KPMG's auto industry leader, says the responses are a sign that the industry is finally getting healthy.

"Vehicle manufacturers understand there is pent-up demand for new cars, especially in the United States, and we're seeing some significant investment in new products and technology," Silberg explains.

Suppliers, meanwhile, are expected to use dealmaking to expand their access to new customers and expand their resources for existing customers. Silberg says that auto manufacturers increasingly are telling suppliers that because their new vehicle models are global platforms, they need partmakers that are global as well.

"If I don't have a global footprint, my probability of winning business is going to be going down," he says.

Some of the largest suppliers are already making moves. Johnson Controls Inc. (NYSE:JCI), for example, in December agreed to buy German seat frame and component maker C. Rob. Hammerstein GmbH & Co. KG for an undisclosed price. Milwaukee-based Johnson Controls said the deal would create "new opportunities for global growth and vertical integration."

Similar phrases may be appearing quite often in deal announcements this year.