Haig Partners LLC, a leading dealership buy-sell advisory firm, has released its Q4 2024 Haig Report®, which provides in-depth analysis of auto dealership mergers and acquisitions (M&A), blue sky multiples, franchise performance, and economic trends impacting the industry. Despite political and economic headwinds, the report confirms that demand for dealerships remains strong, even as profits normalize. Both private and public buyers continue acquiring dealerships across all major franchises.
Strong M&A Activity in 2024
In 2024, Haig Partners played a significant role in dealership transactions, advising on 22 deals involving 58 dealerships nationwide. The firm helped clients achieve record-breaking sales prices for BMW, Honda, and Kia dealerships. This follows the previous year, where record-high values were achieved for Toyota and Stellantis dealerships.
Despite challenges such as tariffs and fluctuating consumer confidence, dealership values remain elevated due to strong profits and sustained buyer demand. According to the report, 510 dealership rooftops changed hands in 2024, making it the fourth-busiest year for auto retail M&A.
Key Findings from the Q4 2024 Haig Report®:
- M&A Activity Stays Strong: 510 rooftops were sold, cementing 2024 as one of the most active years for dealership transactions.
- Blue Sky Values Remain High: The average publicly traded dealership had an estimated blue sky value of $20.9 million, representing a 14% decline from 2023 but still 122% higher than in 2019.
- Profits Above Pre-Pandemic Levels: Average pre-tax profits per dealership reached $4.0 million in 2024, nearly double 2019 levels.
- Private Buyers Dominate the Market: Private dealership groups accounted for 95% of transactions, while public groups focused on opportunities beyond U.S. auto retail.
- Increased Demand for Certain Franchises: Toyota, Mazda, Chevrolet, and Buick-GMC saw rising blue sky multiples due to their strong performance.
- Macroeconomic Challenges Ahead: Inflation and new auto tariffs may influence future valuations.
Franchise-Specific Performance: Winners and Losers
Luxury Brands
- BMW: Poised for growth in 2025 with strong ICE SUV sales, while BEV and PHEV supply is increasing.
- Mercedes-Benz: Remains highly desirable, with dealers reporting consistent profitability.
- Lexus: Highly sought-after brand with limited availability, leading to strong valuations.
- Audi: Sales dropped 14.0% due to inventory shortages, but upcoming Q5 and A5 models may reverse this trend.
- Jaguar Land Rover (JLR): Led all brands in sales growth with a 29.4% year-over-year increase.
- Porsche: Continued record-breaking sales, though dealer outlooks on profit margins vary.
- Volvo: Stable outlook, but dealers expect profits to remain flat in 2025.
- Cadillac: EV models performing well, particularly in states like Texas, California, Florida, and Michigan.
- Acura: Struggling with an aging customer base, with some dealers likening it to “the new Buick.”
- Lincoln: Strong sales, particularly for the Nautilus, though long-term sustainability remains a concern.
- Infiniti: Uncertain outlook, with dealers expecting another challenging year.
Mid-Line Import Brands
- Toyota: Remains one of the most desirable franchises, with many buyers interested despite some concerns about profit normalization.
- Honda: Sales grew 11.1%, but rising floor plan costs could impact profitability.
- Subaru: Sales up 5.6%, with U.S.-centric production helping mitigate tariff risks.
- Kia: Sales increased 1.8%, marking another record year.
- Hyundai/Genesis: Sales grew 4.8%, but buy-sell restrictions slightly reduced demand.
- Mazda: Improved performance and customer loyalty led to higher blue sky multiples.
- Nissan: Sales rose 3.8%, but challenges persist. Some see it as a “buy low” opportunity.
- Volkswagen: 15.2% sales increase, ranking fourth among the 23 brands tracked by Haig Partners.
Domestic Brands
- Ford: Dealerships in rural areas face affordability issues, with slight profit declines expected.
- Chevrolet: Strong lineup, continued market share growth, and high sales for SUVs and mid-size trucks.
- Buick/GMC: 9.1% sales increase in 2024, with some dealers still opting for buyouts.
- Stellantis (CDJR): Sales declined 14.6%, but some believe the brand has hit bottom and is now stabilizing.
Private and Public Groups Continue Expansion
Private buyers dominated auto retail acquisitions in 2024, accounting for 95% of transactions. Private equity-backed groups are becoming more active, contributing to ongoing industry consolidation. Public dealership groups are also expanding, with Asbury’s pending acquisition of Herb Chambers Companies (33 dealerships) marking one of the year’s largest transactions.
“Consolidation is occurring across all levels of the industry,” said Alan Haig, President of Haig Partners. “We see strong demand from family-owned groups, private equity firms, and public companies. Dealership owners looking to exit still have an opportunity to command high valuations before market conditions shift.
