M&A activity hasn’t slowed down in the least bit, the latest acquisition coming from Zeigler Automotive Group who recently purchased a Subaru store in Indiana. Joining us to discuss how his dealer group is expanding is Aaron Zeigler, President of Zeigler Automotive Group.
While there have been a lot of changes with the chip shortage, Zeigler says that things are great within the organization overall. In fact, Zeigler Automotive just purchased a new Subaru store which is a new brand for the organization. In general, car dealers are reporting record profits, and valuations are at an all-time high. Zeigler goes on to say that there is also some fear that Capital Gains Tax might go up, so he thinks there might be a record number of stores sold in the calendar year of 2021.
The conversation then shifts to modern retailing. Zeigler believes that 100% of the customers now start online. By the time they get to the dealership about 80% of consumers will buy a vehicle if they actually come into the showroom, but very few do the transaction 100% online. Zeigler explains that car transactions are complex that consumers still want to talk to a staff at some point during the car-buying journey.
Regarding the current inventory shortages, Zeigler says that his car dealerships have been really aggressive in buying used cars. Just this week they went out and bought 500 used cars from a used Mitsubishi store. Zeigler thinks that over the next 60 to 90 days, used car inventory is going to continue to drop.
The emerging EV market is another development that Zeigler is watching closely. He says demand in the Midwest is lower than the national average and infrastructure has a long way to go. However, Zeigler says that inevitable EVs will dominate the market, and when they do, Zeigler Automotive will be ready to sell them.
Zeigler ends the conversations by taking a look back at the lessons learned from the pandemic as well as forecasts for the future.
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