JT Taylor of Truist Securities shares his economic outlook for automotive retail

Welcome to another edition of Inside Automotive with Jim Fitzpatrick. Joining us on the show today is JT Taylor, Managing Director of Automotive for Truist Securities. JT discusses the M&A environment, how the car business will look over the next two to three years, and market trends including EVs, inventory, and inflation.

The car business today is facing an unusual set of circumstances, says Taylor. Over the next 24-30 months, the experts at Truist expect higher margins and steady consumer demand to continue. The future looks bright for dealer operators, especially those that adapted their businesses during the pandemic. High business returns plus low interest rates equal high value. The automotive buy/sell market is in a golden age of value and opportunity, explains Taylor.

The hot states right now for buy/sell activity are Texas, Florida, and northern Virginia. However it is important to keep in mind that the number one driver of retail is population, says Taylor. So, regions like northern and southern California, Chicago, and New York have robust dealer networks.

Larger private companies will be the ones to drive M&A activity this year, says Taylor. Over the last year and a half, the public companies had great values in the stock market to leverage and fund acquisition strategies that made sense. Now the private companies are doing the same.

For more great insight from JT Taylor, be sure to watch the entire interview above.

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