U.S. Dealership M&A Gains Momentum as Buyers Target High-Value Franchises
The U.S. automotive dealership buy-sell market gained significant momentum during the first half of 2026, as financially strong buyers and major dealership groups increased their focus on premium franchises, larger dealership portfolios and markets with strong long-term growth potential.
According to the newly released Q2 2026 Haig Report® from Haig Partners LLC, the number of dealerships acquired during the first six months of 2026 increased 14.3% compared with the same period in 2025. However, the number of individual transactions rose by only 3.2%. The difference indicates that buyers are increasingly completing larger transactions involving multiple dealerships rather than pursuing individual stores.
Five transactions involving five or more dealerships were completed during the first half of 2026, compared with none during the same period a year earlier. The trend highlights the growing influence of consolidators and large dealership groups, which continue to deploy substantial amounts of capital into franchises and markets they believe can deliver attractive long-term returns.
At the same time, dealership values remain considerably higher than historical levels. Haig Partners estimates that the average blue sky value of a publicly owned dealership was approximately $18.2 million for the 12 months ending in the second quarter of 2026. That figure was largely unchanged from the first quarter and remains more than twice the $8.3 million average recorded in 2019.
Although dealership earnings have softened from the extraordinary levels seen in recent years, strong demand for desirable franchises and attractive markets has helped support valuations.
Dealership Buyers Are Becoming More Selective
The current dealership M&A environment is characterized by strong capital availability combined with greater selectivity.
Large dealer groups continue to have substantial resources available for acquisitions, but they are increasingly concentrating those resources on franchises that provide strong sales volumes, loyal customers, attractive transaction prices and long-term market potential.
This has created what Haig Partners describes as a flight to quality.
Large dealership groups are showing a clear preference for premium luxury and import brands. Over the past 24 months, premium luxury franchises accounted for 36.1% of acquisitions made by the Top 20 dealer groups. That compares with just 22.8% during 2020 and 2021.
Premium import franchises, including Toyota, Honda and Subaru, also increased their share of acquisitions among the largest dealer groups. Their share reached 24.7% over the past 24 months, compared with 21.0% in 2020 and 2021.
Domestic franchises, meanwhile, experienced a substantial decline in their share of acquisitions by major groups. Domestic brands represented 28.7% of Top 20 acquisitions during 2020 and 2021, but that figure fell to 15.1% during the most recent 24-month period.
The shift demonstrates that the largest buyers are becoming more focused on franchises they believe can produce strong long-term returns.
Smaller Buyers See Opportunities
While major consolidators are focusing heavily on premium and high-performing franchises, smaller and regional dealer groups are finding opportunities in other parts of the market.
Domestic dealerships accounted for 48.3% of acquisitions by non-Top 20 dealer groups during the most recent 24-month period. That is more than three times the share of domestic dealerships acquired by the largest groups.
This divergence is creating a more segmented dealership M&A environment.
Local and regional buyers may be able to acquire dealerships that do not fit the acquisition strategy of major consolidators. With the right operating strategy, these stores can potentially provide attractive returns at valuations that are more accessible than those associated with premium luxury franchises.
For dealership owners considering a sale, this environment makes buyer selection increasingly important. The highest offer may not necessarily come from the largest dealership group. A regional buyer with a strategic interest in a particular market or franchise may be willing to place a higher value on an individual dealership.
California Dealership Acquisitions Surge
Regional trends are also influencing dealership M&A activity.
California experienced a particularly strong rebound during the first half of 2026. Dealership acquisitions in the state increased 76% compared with the same period in 2025.
The Southeast, meanwhile, continued to rank as the most active region in the United States for dealership transactions. Population growth, economic development and business-friendly markets continue to make the region attractive to dealership investors and consolidators.
These regional differences demonstrate the importance of market demographics when evaluating dealership acquisition opportunities.
Dealerships located in areas experiencing population growth, rising household incomes and increasing vehicle demand can attract significant buyer interest. Conversely, dealerships in slower-growth markets may require more careful financial analysis before buyers commit capital.
Dealership Profits Remain Historically Strong
Despite the normalization of dealership earnings, profitability remains well above pre-pandemic levels.
Average dealership profits were approximately $1.1 million in the second quarter of 2026. That represented a 3.0% decline from the same quarter in 2025 but remained 119% higher than the second quarter of 2019.
The results show that dealerships are still operating from a significantly stronger earnings base than before the pandemic.
However, profitability is becoming more challenging.
New vehicle gross profit per vehicle retailed fell 15.8% year over year to approximately $2,764. Used vehicle gross profit per vehicle retailed also declined, falling 2.0% to approximately $1,634.
Fixed operations provided some support. Same-store fixed operations gross profit increased 2.3%, although that growth remained below the rate of inflation.
The changing profit environment means dealership operators must focus increasingly on efficiency and operational discipline. The exceptional margins generated during the pandemic-era vehicle shortage are no longer available at the same level.
Dealership Values Remain Above Historical Norms
Even with lower earnings, dealership valuations continue to be significantly higher than historical averages.
The average blue sky value of a publicly owned dealership reached approximately $18.2 million for the 12 months ending in Q2 2026. While this was slightly below the $19.0 million average recorded for full-year 2025, it remained more than twice the 2019 average.
The resilience of dealership valuations demonstrates the strength of buyer demand.
Strong multiples indicate that investors continue to view automotive retail as an attractive long-term business despite current challenges involving vehicle affordability, interest rates, inventory levels and changing consumer preferences.
In addition, higher average valuation multiples have helped offset some of the decline in dealership earnings.
Toyota and Lexus Continue to Attract Strong Interest
Franchise desirability remains one of the most important factors affecting dealership valuations.
Haig Partners increased its estimated blue sky multiple ranges for Toyota and Lexus during the second quarter, reflecting continued demand for both franchises.
Toyota remains one of the strongest-performing brands in terms of dealership throughput. Toyota dealerships average approximately 1,750 new vehicle sales annually, according to Haig Partners.
Lexus also stands out among luxury brands, averaging approximately 1,488 new vehicle sales per dealership each year.
The combination of strong sales volume, customer loyalty, brand reputation and attractive fixed operations makes both franchises highly desirable acquisition targets.
Porsche, however, saw a different development. Haig Partners reduced the upper end of its estimated Porsche valuation range because of concerns surrounding product strategy, pricing, tariffs and facility requirements.
The contrasting movements demonstrate that even premium brands are being evaluated carefully by buyers.
New Franchise Horsepower Index Offers Another Valuation Tool
One of the most notable developments in the Q2 2026 report is the introduction of the Haig Partners Franchise Horsepower Index™.
Traditionally, dealership buyers and sellers have relied heavily on blue sky multiples when evaluating franchise values. While multiples provide an important indication of market sentiment, they do not necessarily capture the underlying economic potential of a franchise.
The Franchise Horsepower Index™ attempts to provide another perspective.
The index measures new vehicle throughput multiplied by the average new vehicle transaction price and compares the resulting figure with the overall market average, which is represented by an index value of 1.00x.
The concept is based on the importance of the new vehicle department to the overall dealership business.
New vehicle sales generate revenue and also contribute to activity in used vehicles, finance and insurance, service and parts operations.
Higher new vehicle throughput can produce more trade-ins and service opportunities, while higher transaction prices can increase the potential value of finance and insurance products.
Lexus Leads Franchise Horsepower Rankings
Several brands stand out under the new Franchise Horsepower Index™.
Lexus recorded the highest score at 2.55x, meaning its estimated new vehicle revenue per dealership is more than two and a half times the market average.
BMW followed with a score of 2.15x, while Toyota recorded 2.03x. Mercedes-Benz posted a score of 1.75x.
The results highlight an important characteristic of successful automotive franchises: the ability to combine strong vehicle sales volume with relatively high transaction prices.
Porsche provides an interesting comparison.
A typical Nissan dealership sells approximately 2.2 times as many new vehicles as a Porsche dealership. However, the average transaction price of a new Porsche is approximately 3.6 times higher than that of a Nissan.
When volume and transaction price are considered together, the average Porsche dealership generates approximately 1.6 times more new vehicle revenue per store than the average Nissan dealership.
This illustrates why sales volume alone cannot determine the economic strength of a franchise.
Honda Emerges as a Potential Value Opportunity
Honda is another franchise attracting attention in the current M&A environment.
Honda dealerships sold approximately 1,241 new vehicles per store during the 12 months ending in Q2 2026. That compares with an average of approximately 774 units across the franchises tracked by Haig Partners.
Honda also delivered strong sales growth during the quarter, with sales increasing 9.4% compared with the prior-year period.
Models including the CR-V, Accord and Civic contributed to the brand’s performance.
Honda’s hybrid strategy is another important factor. During the first half of 2026, Honda sold 213,513 hybrid vehicles, representing 31.1% of its sales.
The combination of strong sales, customer loyalty and hybrid demand gives Honda many of the characteristics that buyers find attractive in Toyota.
However, Honda dealerships currently carry an estimated blue sky multiple that is nearly 20% below Toyota’s.
That valuation difference could create an attractive opportunity for buyers looking for a strong franchise without paying the premium associated with Toyota.
What the 2026 M&A Market Means for Dealers
The first half of 2026 demonstrates that dealership M&A remains active, but the market is changing.
Large dealer groups are becoming more selective, concentrating their acquisition strategies on premium luxury and import franchises in markets with strong growth potential.
Smaller dealer groups, meanwhile, continue to find opportunities among domestic franchises and other dealerships that may not meet the acquisition criteria of the largest consolidators.
For sellers, the changing market makes strategic positioning more important than ever.
A dealership’s value depends on much more than current earnings. Brand strength, market demographics, sales volume, customer loyalty, facility requirements, fixed operations performance and the strategic fit with a potential buyer can all influence the final transaction value.
Outlook for Dealership M&A
The U.S. dealership buy-sell market appears positioned for continued activity during the remainder of 2026.
The availability of capital remains strong, while dealership valuations continue to sit well above pre-pandemic levels. At the same time, buyers are exercising greater discipline and carefully evaluating the long-term economics of individual franchises.
The 14.3% increase in dealership acquisitions during the first half of the year, combined with the 3.2% increase in transaction count, suggests that consolidation is becoming an increasingly important part of the market.
The emergence of larger multi-store transactions also indicates that well-capitalized dealership groups remain willing to make significant investments when the right opportunities become available.
The new Franchise Horsepower Index™ adds another layer to the valuation conversation by helping buyers compare the underlying revenue potential of different franchises.
Ultimately, the 2026 dealership M&A market is becoming less about simply owning more stores and more about owning the right stores.
Premium franchises, high-growth markets and strong operating economics are commanding significant attention from major buyers. Meanwhile, brands such as Honda may offer compelling value where strong fundamentals are paired with relatively lower acquisition multiples.
As dealership earnings continue to normalize, owners and buyers alike will need to look beyond headline profits and traditional valuation multiples. Understanding franchise economics, market potential and strategic buyer demand will be critical for making successful acquisition and sale decisions in the evolving U.S. automotive retail industry.
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