On the Dash:
- Buy/sell activity reached a record 462 transactions in the trailing 12 months through June.
- Buyers are paying premiums for high-volume franchises that offer scale and strong local market share.
- Honda and Kia gained valuation momentum, while Volkswagen and Audi faced multiple downgrades.
The auto dealership buy/sell market completed a record 462 transactions in the trailing 12 months through June, extending a run that has held steady even as dealership earnings soften, according to the newly released Second Quarter 2026 Blue Sky Report from Kerrigan Advisors.
Dealers closed 224 transactions in the first half of 2026, up 2% from 220 a year earlier, running 107% above the 2015-2019 pre-pandemic average. Industry earnings fell between 10% and 20% year over year, yet buyers kept betting on long-term consolidation rather than pulling back. Record valuations for top franchises show dealers’ confidence in auto retail’s long-term growth, even as margins softened, said Erin Kerrigan, founder and managing director of Kerrigan Advisors.
Scale has become the primary driver of that activity, as buyers pay premiums for high-volume stores and groups with strong local market share. The announced sale of Hennessy Automobile Companies to Group 1 Automotive illustrates the trend. The $1.3 billion deal, the third-largest in industry history, included $1 billion in blue sky, a record for a 10-dealership group, backed by Hennessy’s $170 million average revenue per rooftop, more than double the national average.
Public dealer groups paid a record $119 million on average per acquired dealership in 2026, with 91% of those deals falling in markets where the buyer already operated. Trailing 12-month public group spending reached $6.0 billion, the second-highest level on record.
Despite softer earnings, the Kerrigan Blue Sky Index held at 178, 78% above its 2019 level. Domestic brands’ share of buy/sell activity slipped to 46% from 51% in 2025 as buyers chased import franchises, including Hendrick Automotive Group’s purchase of Foreign Cars Italia, adding Hendrick’s only Ferrari franchise.
Geography and technology are reshaping values too. High-growth states such as Texas, Florida and Georgia command premiums of up to 2.5 turns on blue sky multiples, while the Kerrigan Index of six public retailers rose 9.4% through July on investor confidence in AI-driven scale.
Kerrigan Advisors raised Kia’s multiple to 5.0x and upgraded Honda’s outlook, while downgrading Volkswagen to 2.25x-3.0x and Audi to 5.5x-6.0x amid weak demand. The average multi-dealership transaction now runs about $90 million, and scale, market position and technology increasingly define future value.
