Inside Automotive
The dealership M&A landscape is changing: is now a good time to sell? – Farid Ahmad | DSMA
With today’s economic headwinds and the return of competitive pricing at the dealership, is now a good time for business owners to buy or sell? On this edition of Inside Automotive, we are joined once again by Farid Ahmad, the founder and CEO of DSMA, a leading dealership M&A firm, to walk us through his recommendations. Watch full segment here.
Top Stories
After increasing steadily since January, wholesale used-vehicle prices started to fall once more over the last two weeks. Cox Automotive reports that the Manheim Used Vehicle Value Index dropped to 231.7 by mid-April, a 4% decline from the same period in 2022. Cox attributed the drop to seasonal adjustments, and noted that non-adjusted prices were virtually unchanged from their levels in March. The research firm also found that tax refunds were arriving later than usual this year, a factor which could stifle market activity until more rebates are issued. Read More
Tesla is slashing prices once again, this time for certain trims of its SUV and best-selling sedan. On April 18, the brand’s website showed that the Model Y’s performance and long range versions had received discounts of $3,000, while the price for the rear-wheel drive option on the Model 3 decreased by $2,000. The sales come on the eve of the automaker’s first quarter report, which analysts expect will reveal the company’s lowest profit margins since 2020. Read More
Stellantis is recalling over 131,000 trucks due to a software issue affecting powertrains. The recall applies to 2021 Ram pickups with a 5.7 liter eTorque engine. According to the National Highway Traffic Safety Administration, a computer error in the powertrain control module can cause the vehicle’s engine to stall. The problem can be fixed through a software update, a procedure dealers will conduct for free. Earlier this year, Stellantis recalled roughly 340,000 Ram products to fix an electrical fire hazard. Read More
EV maker Rivian announced it would allow other brands to use its private fast chargers, just months after Tesla opened its own network to the public. Company executives said third-party customers would be able to use the chargers as soon as next year, and that the brand would be working to expand access in the coming months. Currently, the automaker has 30 installations in the U.S. and Canada, but plans to open up an additional 570 sites by 2025, bringing its total number of chargers to 3,500. Read More
For Dealers
Q&A with Bill Glik: Data integration streamlines critical HR reporting and sales forecasting for dealers
Auto dealerships are paying close attention to talent management amidst current economic conditions. Without adequate resources, automotive retailers cannot maximize revenue and compete effectively in the market. Although talent is available, attracting and retaining skilled employees can be challenging. As such, organizations are considering the need for unified workforce planning to ensure effective hiring and deployment of talent, especially during economic uncertainty, currently characterized by inflation and rising interest rates. Read More
The 2023 outlook for autotech M&A activity
The outlook for automotive technology (autotech) mergers and acquisitions (M&A) should prove to be strong over the remainder of 2023 for a number of reasons. Let’s explore these below. First up, company valuations are dramatically lower than they were at their peak. The SaaS Capital Index, which tracks the larger publicly listed software-as-a-service (SaaS) companies, is currently trading at 7.1x annualized-revenue-run-rate (ARR), well down from its peak of 16.4x ARR back in late 2021. Read More
