As market conditions shift, dealership acquisitions remain strong, with 2024 marking another record-breaking year for buy-sells. In today’s episode of Inside Automotive, Ryan Kerrigan, managing director at Kerrigan Advisors, discusses the evolving automotive retail market, dealer sentiment amid economic uncertainty, and key insights from the latest Blue Sky Report. Kerrigan highlights how some dealers are looking to exit after years of volatility, while buyers see 2025 as a prime opportunity to invest in the industry.
Many dealers, especially those who have weathered economic downturns, supply chain disruptions, and fluctuating consumer demand, are now considering selling. Kerrigan emphasizes that dealership owners today have a significantly higher net worth than they did five years ago, making it an opportune time for some to exit the market rather than face additional uncertainty. Anxiety over tariffs, economic conditions, and market unpredictability has pushed some dealers toward selling their stores.
Despite the uncertainty, 2025 presents a strong market for buyers. While 2024 performance was understated for many dealers, long-term trends suggest stronger results over the next five to ten years. The absence of “froth” in the market indicates a more stable environment for acquisitions, with real estate values in automotive retail remaining particularly strong compared to other sectors.
The Kerrigan Advisor’s Blue Sky Report reveals that 2024 set another record for buy-sell activity, with 438 transactions and nearly 700 franchises traded. There’s also a growing trend in manufacturers using the right of first refusal, which can impact dealership valuations. Additionally, the report explores the growing influence of the Chinese auto industry and its potential effects on global markets.
Kerrigan also provides insights into Stellantis and Nissan, two brands facing challenges. The report indicates a decline in valuation multiples for both brands, with Stellantis showing early signs of a turnaround and Nissan struggling to establish a clear global strategy. While some Nissan dealers remain profitable, the brand faces a longer road to recovery.
Kerrigan notes that Carvana’s recent acquisition of a Stellantis dealership signals potential changes in the retail landscape. While Carvana’s foray into new car sales is intriguing, he compared it to CarMax’s past attempt, which ultimately did not disrupt the new car market. He adds that managing new vehicle pricing with incentives and OEM relationships presents unique challenges compared to the used car business.
"2024 was a banner year for buy-sells—439 transactions, another industry record, and nearly 700 franchises traded. Just a remarkable continuation of this trend we’ve seen year after year." – Ryan Kerrigan
