Will strong M&A activity continue through major auto industry changes? – Alan Haig, Haig Partners

Haig Partners is set to release its 2020 Q4 Haig Report in the near future. The report tracks trends in the retail automotive market and how those trends impact dealership values. Today on CBT News, Alan Haig, President and Founder of Haig Partners, joins the show to discuss the year-end findings ahead of the report. 

Haig begins the interview by discussing the status of M&A activity. In the fourth quarter of 2020, the buy-sell market recovered very strongly. Haig says that 2020 Q2 was a very scary time for many in his business because many deals were put on hold. He attributes the strong recovery to profits skyrocketing before the end of the year. When profits are high, many buyers see it as an opportunity to grow their business. 

Haig says that the current automotive market provides a great opportunity for sellers to get the most out of their car dealerships. As the business undergoes dramatic changes with new technologies and digital retailing, many dealers see it as a time to transition out of the industry. This creates room for a new generation of dealers looking to embrace the changes of the retail automotive business. 

Haig praises the retail automotive industry for its ability to embrace flexibility. He says that dealerships are not one-trick ponies, making them sustainable for years to come. This was primarily seen during the pandemic, as many dealers pivoted their efforts away from new-car sales to areas of the business such as used-vehicle sales, F&I, and fixed-ops.

Haig concludes the conversation by talking about the benefits of one-price business models compared to conventionally negotiation models. He says that each model has specific models that work for specific markets. Haig says it’s hard to create a one-price model in large automotive markets like Atlanta, Georgia because the rate of competition is so high. However, smaller markets allow dealers to form personal relationships with their customers, helping them build trust in the buying process.

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