It’s been an active month at The Presidio Group, which announced the closings of several high-profile dealership transactions. In today’s episode of Inside Automotive, Alex Watterson, Presidio’s managing director and partner, shares insights into the current state of the buy-sell market and Presidio’s recent dealer sentiment survey.
The first two quarters of the year were slower, primarily due to uncertainty surrounding the presidential election and caution as the Trump administration’s policies unfolded. Now that the commotion has settled, the buy-sell market is heating up, with dealers revisiting acquisitions they had previously passed on.
June was one of Presidio’s busiest months on record, with the firm successfully facilitating several significant transactions. Among them: Asbury Automotive sold two Toyota stores, the Larry H. Miller Toyota Corona and LHM Toyota Lemon Grove, in Southern California. Presidio also helped the Higginbotham family sell Mercedes-Benz of Jackson and Mercedes-Benz of Collierville to Lithia Motors.
There have also been notable improvements in brand and market sentiment. Optimism around Mercedes-Benz is rising following the appointment of new U.S. CEO Adam Chamberlain and improvements in the brand’s EV strategy. Toyota and Lexus remain in high demand, particularly in Texas and Florida.
Dealers are also showing renewed interest in California markets now that the California Air Resources Board (CARB) zero-emissions waivers have been revoked by the Trump administration. Watterson notes that several buyers who previously passed on CARB-state deals are circling back to reevaluate.
Presidio’s mid-year dealer sentiment survey, which represents 3,000 rooftops, uncovered some revealing trends. Two-thirds of the respondents plan to acquire a dealership within the next 12 months, signaling sustained demand. Dealers are currently earning an average of 80% more than they did during pre-pandemic, and 75% believe those earnings will remain stable or increase in the coming year.
"Dealers are resilient. They will figure this out, one way or another. Whether it is passed on to the consumer or the manufacturer eats the increase."
While 63% of dealers believe the tariffs will have some financial impact on their operations, most view them as temporary and are already adapting. The impact is felt more acutely by import-only brands such as Porsche, Audi and Land Rover.
Watterson expects market consolidation to continue at a steady pace. Despite the headlines, public groups still own just 6% of U.S. dealerships, a modest increase of only 1% since 2019. The top 150 groups, excluding the publics, account for 18% of U.S. rooftops.
Even with consolidation on the rise, there’s still a future for single-store and small operators. The long-term picture will depend heavily on how OEMs approach market-point strategies and consolidation goals.
Watterson also predicts a rising interest in Stellantis dealerships. With new executive leadership changes and a strong product portfolio, Stellantis stores may represent a compelling “buy-low” opportunity as performance improves.
Looking ahead to the second half of the year, Presidio’s pipeline remains strong, with several closings expected. M&A activity is expected to remain high, with both public and private buyers remaining bullish.
