Last year was monumental for mergers and acquisitions. Can the auto industry expect to see more of the same in 2022? On this edition of Inside Automotive, we’re pleased to welcome back Alan Haig, President and Founder of Haig Partners, who shares his perspective on the buy-sell market, and discusses the concerns car dealers are facing today.
2022 is off to a better start than 2021, says Haig. As incredible as last year was, it appears to keep getting better. Profits more than doubled from pre-pandemic times, and retailers are reporting that January profits are up 30, 40, even 50% versus this time last year.
The biggest concern car dealers face, in Haig’s perspective, is the lack of inventory. Many dealers have done a good job supplying their salespeople with used vehicles right now. However, some dealers are having to come up with new ways to price their new vehicle inventory. Additionally, General Motors and Ford both have been vocal about the consequences dealers face if they charge over MSRP for products. That’s a high-class problem, says Haig. There are still issues surrounding labor, inflation, and interest rates to consider.
In terms of the buy-sell market, Haig says buyers are struggling to value franchises right now for potential clients. It’s difficult to know what’s going to happen one month or three months down the road. Dealers that have a group of stores are seeing impressive profits that are unlikely to go away soon. So, Haig thinks a lot of people are willing to pay more for a business today, than before the pandemic because they know the return on investment will be strong.
To learn more about the state of the automotive industry’s buy-sell market, check out the upcoming 2022 Buy/Sell Summit and Dealer/CFO/CEO Forum presented by Auto Team America. This summit will be held on March 10 just before the NADA Show in Las Vegas.
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