As our M&A experts have reported, public transactions have slowed, but the private market is still very active, especially for Sutherlin Automotive. Recently, the group sold three of its dealerships and acquired a Toyota-Lexus store. Today on Inside Automotive, we’re pleased to welcome Sutherlin Automotive CEO, Brett Sutherlin, to tell us about the group’s latest deals and what the future of automotive could look like.
From Sutherlin’s perspective Toyota and Lexus are very valuable additions to their group, and when asked about future acquisitions, he confirms that Sutherlin Automotive is actively pursuing new deals, with a focus on working on six to seven new acquisitions at any given time. While some deals take longer than others, Sutherlin emphasizes his commitment to growing the business through acquisitions.
Regarding dealership valuations and the changing dynamics of the automotive industry, Sutherlin explains that he evaluates the potential of under-performing dealerships based on what he believes he and his team can achieve. He mentions making an offer on a dealership with a 12-time multiple, confident in his ability to drive profits and significantly improve the dealership’s performance.
Sutherlin also discusses his strategy of targeting single-point markets and his decision to exit three stores in Atlanta. He believes that larger single-point markets offer better opportunities for success. Drawing from his experience in the industry and successful digital ventures, Sutherlin emphasizes the importance of building partnerships and empowering general managers with a stake in the business.
As for the current state of operations, including the impact of COVID-19 on customer demand and inventory levels, customers are still interested in lower-priced vehicles and higher-priced models are experiencing a slowdown in sales. Sutherlin also acknowledges concerns about the increasing average price of new cars, the negative equity resulting from high trade-in values, and the potential long-term viability of electric vehicles.
He is skeptical about the immediate future of EVs, citing inadequate infrastructure and slow adoption. He believes hybrid vehicles are a more practical solution for consumers concerned about limited EV range, and questions whether the infrastructure and technology will evolve fast enough to support widespread EV adoption.
Overall, the vision for Sutherlin Automotive centers around acquiring the right brands in the right markets, nurturing partnerships, and leveraging his team’s expertise to drive success. While facing challenges in the industry, he remains optimistic about the future and the opportunities that lie ahead.