Haig Partners’ Post

It is an honor to have the opportunity to speak to dealers, present at auto retail conferences, and discuss auto retail trends and their impact on dealership values. One thing I am hearing more about is succession planning. Believe it or not, there are many aging dealers without what I call a "successful" succession plan. There are many who believe their children want to take over the family business, but when talking to the next-gen, they are still determining if they really do. Other owners of high-value dealerships may think there is no current need, whether it be due to age or type of ownership.

2023 is shaping up to be the third-most active year in dealership buy-sells, down from the all-time record in 2021. Looking to 2024, dealership buy-sell activity will remain active, as dealers are still experiencing profits more than 2x higher than in 2019, and demand for stores continues to be elevated. Alan Haig shares in this WardsAuto article, “We believe blue-sky values will remain elevated, since buyers believe profits will also remain elevated. "Blue sky” is the portion of the price above and beyond the value of a dealership’s physical assets." https://bit.ly/48vMw5O

“There could be an increase in sellers ready to cash in on generations of hard work, as they suspect the automotive retail game may be changing.” Erin Kerrigan Commentary from Kerrigan Advisors' recent American International Automobile Dealers Association (AIADA) webinar and highlights from our 2023 Annual Blue Sky Report® were featured in a WardsAuto article written by Jim Henry this week. Despite higher interest rates and softening profit margins, buy/sell activity remains strong in 2024. Sellers are coming to market given strong blue sky values, and buyers are motivated to put their record profits from 2021 and 2022 to work. Read the article here: https://lnkd.in/egT_MM7S #wardsauto #blueskyreport #buysells #dealerships #automotive #autoretail #kerriganadvisors #aiada

Great article in Automotive News regarding dealership values and what the predictions are for the future

U.S. auto dealers have a moderately negative outlook about how dealership financial performance and valuation will trend over the next year, but that hasn’t dampened their enthusiasm about the industry. Retailers generally view the performance dip as part of the normalization process from pandemic profit highs. And even with the likely declines, the majority want to keep expanding their dealership groups. Nearly 80 percent of dealers who responded to a survey conducted by The Presidio Group this fall expressed interest in buying dealerships over the next 12 months. The Presidio Group’s inaugural Dealer Direction Survey aggregated responses from 108 survey takers representing nearly 2,500 franchised dealerships. In addition to their outlook about dealership profitability, valuations and acquisitions, we queried respondents on the factors that will most challenge dealers in both the short and long term. Dealers responding also ranked the desirability of owning stores of specific brands.   It is all part of Presidio’s inaugural quarterly report - “Presidio Perspectives: A Quarterly Outlook on Auto Retail and M&A Trends,” which also includes NCM Associates dealer data, an M&A activity report, dealership valuation guide and more. Read the report at: https://lnkd.in/egcNUM4g.   To register for future reports, go to: https://lnkd.in/eDSdaVna

Trucks, Parts, Service just released Part 1 of our two-part series on the status of dealership M&A trends entering 2024. 📈 Dive into the latest insights and discover key strategies to stay ahead in the ever-evolving automotive industry. Check out the link below and stay tuned for Part 2! 👇 #commercialtrucks #dealership #mergersandacquisitions #2024outlook

When it comes to dealership M&A in 2024, owners are taking stock of the market to determine their next moves. See what our own James 'JT' Taylor has to say about the five factors shaping auto retail this year. bit.ly/3U3Ku8r

Boom times fade as dealerships, used-car sellers face continuing challenges. After record revenue years during the pandemic and just afterward, dealerships are settling in to the "new normal" — which is similar to the old normal. The top franchised dealership groups — both public and private — readjusted revenue goals and looked for new areas of growth as they struggled with rising inventories, high interest rates, and expensive vehicles. Read the article https://lnkd.in/edAzezv6

Boom times fade as dealerships, used-car sellers face continuing challenges. After record revenue years during the pandemic and just afterward, dealerships are settling in to the "new normal" — which is similar to the old normal. The top franchised dealership groups — both public and private — readjusted revenue goals and looked for new areas of growth as they struggled with rising inventories, high interest rates, and expensive vehicles. Read the article https://lnkd.in/esKn2XYm

“The industry has an overabundance of cash… and a lot of that money is going to be plowed into buying more dealerships.” Erin Kerrigan Kerrigan Advisors’ commentary from a recent American International Automobile Dealers Association (AIADA) webinar was featured in a WardsAuto article. Erin Kerrigan shares that one of the key drivers of today’s buy/sell market is the fact that dealers are sitting on record levels of cash and looking to deploy their capital into auto retail, the industry they know well. Read the full article: https://lnkd.in/gTYVvdYH #buysell #automotive #auto #dealerships #dealershipprofits #wardsauto