Automotive retail continues to show underlying strength despite geopolitical uncertainty, rising energy prices, and evolving federal policy, according to Kerrigan Advisors Managing Director Ryan Kerrigan.
During today’s episode of Inside Automotive, Kerrigan alludes that the industry remains fundamentally stable, supported by steady consumer demand even as dealers navigate short-term volatility tied to oil markets and regulatory developments. While headlines often signal turbulence, he believes dealership performance has remained consistent, with March delivering solid retail activity across many markets.
Market stability and demand shifts
With fuel prices averaging above $4 per gallon nationally, Kerrigan said rising costs have already begun to re-influence consumer interest in EVs. He described the oil price spikes as recurring market events that tend to accelerate interest in alternative fuel options, though he cautioned that the long-term impact depends on how sustained those pressures prove to be.
He also alluded to broader macroeconomic conditions, suggesting that Q1 sales trends were affected in part by severe winter weather across the U.S. Despite those disruptions, Kerrigan emphasized that the American consumer remains the primary driver of automotive demand and overall industry stability.
Global trade pressures
On the policy front, Kerrigan highlighted recent federal actions eliminating California-specific emissions standards, a move he said restores greater consistency across the national automotive market. He argued the previous regulatory framework created a fragmented compliance structure that complicated operations for both OEMs and dealers, and said the return to a unified national system represents a structural improvement for the industry.
Additionally, Kerrigan addressed ongoing policy debates in Washington surrounding EV mandates and trade restrictions. He said most industry participants support EV adoption when driven by consumer demand, but continue to raise concerns about top-down regulatory approaches and uneven implementation across jurisdictions.
On global competition, Kerrigan said Chinese automakers present a fundamentally different challenge than prior Japanese and Korean entrants due to the scale of state involvement, deep technology integration, and potential data security risks. While North American markets remain largely insulated, he noted increasing exposure in regions such as Canada as Chinese EV exports expand.
Referencing historical precedent, Kerrigan compared today’s trade dynamics to earlier import cycles that reshaped the U.S. auto industry. He said those transitions were disruptive but ultimately managed within allied trade frameworks, contrasting that environment with the current geopolitical relationship involving China.
Industry consolidation
Turning to industry structure, Kerrigan said dealership mergers and acquisitions activity continues to accelerate, with Kerrigan Advisors handling significantly more transactions than a year ago. He attributed the increase to a sustained wave of consolidation across the retail landscape.
He added that while profitability has normalized from post-pandemic peaks, earnings remain strong enough to support ongoing deal activity and stable valuations across the sector.
“We’re probably just have a slew of things to talk about publicly in the quarters to come.”
Kerrigan also noted that public dealer groups are under pressure to refine their growth narratives in capital markets, while private dealer groups are becoming increasingly active in consolidation. He pointed to mid-sized private operators with expanding rooftop portfolios as key drivers of the next phase of industry reshaping.
Moving forward, Kerrigan reiterates that continued fragmentation in the retail automotive sector will sustain consolidation momentum, particularly among operators seeking scale advantages in purchasing power, operational efficiency, and long-term competitiveness.
