Despite the unpredictability of today’s retail automotive market, 17% of Colorado’s new-vehicle dealerships changed hands last year, according to Automotive News. The buy-sell market continues to heat up in the state and on today’s show, we talk to Tim Jackson, President and CEO of the Colorado Automobile Dealers Association, to find out why.
According to CADA numbers, 62 different car dealership transactions in 2021, up nearly 20% year-over-year. M&A activity is up nationwide, however, Jackson attributes the record numbers in Colorado to the rapidly growing population. He says that the population has tripled over the last 50 years and throughput is much high because the number of rooftops has not expanded at the same pace.
Colorado, like the rest of the country, is facing inventory crunches and other supply chain woes, but profitability and demand are robust. EV penetration in the state is also holding strong. In fact, Colorado is consistently ranked fifth for EVs per capita. Jackson adds that, like new ICE vehicles, incentives are decreasing, and the $1,500 EV tax credit ends this year.
As demand for electric vehicles increases, some car dealers are concerned about losing their service business. Jackson says this is top of mind for many dealers in his state and he believes that unique service and specialized technicians are critical for the future. Car dealers will have to grapple with finding and training the technicians of the future, higher equipment costs, and higher insurance premiums.
As for CADA’s 2022 agenda items, Jackson says that the legalization of Cannabis in Colorado has contributed to an uptick in compromised driving. Jackson is committed to keeping customers safe and educated about safe driving. He encourages other associations, OEMs, and dealers to do the same.
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