Dealerships

Penske purchase 'almost doubles' standalone used-car business in UK

BLOOMFIELD HILLS, Mich.  - 

Penske Automotive Group is buying another used-car retailer in the U.K., a move the group’s chairman says “almost doubles” its standalone pre-owned store business in the country.  

The dealer group said Tuesday it has signed a deal to purchase The Car People, a used-car retailer with four large-scale locations that sell a combined total of approximately 18,000 units per year.

The Car People launched in 2000 and has stores in Wakefield, Sheffield, Manchester and Warrington, Penske said.

“I am excited to be joining forces with the team at The Car People, a great business that operates under a similar model to our own,” Penske Automotive Group chairman Roger Penske said in a news release.

“The acquisition of The Car People strengthens the company’s market position in our second largest market, almost doubles the size of our U.K.-based Used Car Supermarket business, and continues to further our diversification strategy within the transportation services industry,” he said.

The purchase, which is subject to certain conditions, will likely close in the first quarter. The dealer group estimates The Car People will bring in about $300 million in annualized revenue, and estimates annualized accretion from the deal at $0.05 to $0.07 per share. 

This follows a similar move Penske made in early January, when it announced an agreement to buy CarShop, a U.K. chain of five standalone used-car retail stores. That acquisition was completed in February.

“The acquisition of The Car People enables us to accelerate the expansion of our Used Car Supermarket Division and reinforces our commitment to significantly grow our used-car business,” said Darren Edwards, chief executive of Penske’s U.K. operations.

“Combined with the acquisition of CarShop earlier this year, this new acquisition will provide for potential significant operational synergies within this part of our business,” he said.

Stateside, Penske announced a deal last December to buy U.S.-based used-car retailer CarSense, closing that acquisition in January.

Both moves from earlier this year appear to be bearing fruit for the company.

In the third quarter, Penske Automotive’s CarSense and CarShop standalone used-car business lines retailed a combined 11,626 units, according to company earnings.

Year-to-date, which includes results since acquisition, the standalone platforms had retailed 30,952 used units through three quarters.  

Quarterly revenue from the standalone stores in Q3 approached $200 million, while year-to-date revenue was at $535.7 million.

Gross profit per unit retail was at $1,152 in the quarter, with the year-to-date figure at $1,222.  

F&I gross profit per unit on these sales were $1,188 in Q3 and $1,182 year-to-date through Q3, putting the total variable gross profit per unit at $2,340 and $2,404, respectively.

During the Q&A portion of Penske’s quarterly earnings call in October, Roger Penske was asked if his viewpoint on CarShop and CarSense had changed since the dealer group purchased the respective used-car standalone retailers.

 “Yeah, it’s changed. I like it more,” Penske said with a laugh.

“I think we’re very fortunate to get into this business,” he said. “The technology, the people. We’ve had no turnover with senior management. Both of these businesses, I think they applaud the fact we’ve come in with capital, with ideas, with an expansion mode offense.”



DealerRater adds 2 new offerings to Connections product suite

WALTHAM, Mass. - 

DealerRater has introduced additional enhanced offerings as part of its new Connections product suite that is designed to create personal connections between dealerships’ top salespeople and ready-to-buy shoppers.

First launched in September, DealerRater Connections allows dealerships to create dealer and employee profiles linked to their reviews shared across DealerRater’s strategic syndication partner sites.

The new DealerRater Connections Plus leverages ReviewBuilder, which offers users an automated and customized way to earn more reviews. And the new Connections Premier offering provides dealerships with a dedicated Success Partner whose role is to jumpstart onboarding and keep employee profiles up-to-date.

“Over the past 15 years, we have witnessed a growing importance around a dealership’s online reputation to build more trust in the car buying process. In that time, consumers have written more than four million dealership reviews on DealerRater,” company general manager Jamie Oldershaw said in a news release. “In an effort to bring our dealer partners a new level of automation, convenience and personalization to their review-building program, we’re thrilled to introduce DealerRater Connections Plus and DealerRater Connections Premier.

“We know the majority of car buyers prefer to select a salesperson before arriving at the dealership, and 80 percent of DealerRater Certified Salespeople say their employee profile helps them sell more cars,” he said. “It goes without saying that we want to make it as easy as possible for dealers to reach shoppers by building their digital footprint and drive business growth.”

Additionally, using ReviewBuilder, dealers can solicit up to four times more reviews automatically via text or email through integrations with most DMS systems, according to DealerRater.

“DealerRater reviews help me stand out in a crowd of other salespeople and lets the customer know I’m a trustworthy sales consultant who will take good care of them,” said Rick Kruger, DealerRater certified salesperson and sales and leasing consultant at Don Ayres Honda in Fort Wayne, Ind.

“Building strong rapport with a customer is critical to making a sale, and through my employee profile I get to build that relationship before they even walk in the showroom. Not to mention, I have more customers seeking me out – some have traveled more than 150 miles just for me,” Kruger continued.



EFG Companies releases award-winning service-drive app developed by Northwood students

DALLAS - 

What was nurtured in the classroom is now ready for deployment to help your dealership service drive.

This week, EFG Companies announced the launch of Driver’s Advocate, a mobile app representing the culmination of both the 2015 and 2016 Northwood University Innovator of the Year Award winning products. Driver’s Advocate was designed to foster greater consumer loyalty through service drive retention, while also providing theft protection and inventory management.

Driver’s Advocate provides consumers with:

• A service scheduler

• Direct, mileage-based messaging with service and maintenance reminders

• A loyalty point tracker, where loyalty points can be used for discounts on services provided, and/or as a down payment towards their next vehicle purchase with the selling dealership

• A theft tracker that alerts consumers when their vehicle moves while they are not in it

• An easy-to-use fuel finder

The mobile app features click-to-call roadside assistance, centralized, easy access to consumer protection plans, recall notifications, a service center locator, full vehicle information repository and transparent dealer pricing.

“Dealers offering Driver’s Advocate benefit from a significant customer retention tool through the app’s service scheduler, couponing feature and maintenance notifications based on individual consumer mileage,” said Greg Grimes, vice president of operations with the Rohrich Auto Group. Grimes served as a mentor in the 2016 Northwood Innovator of the Year Contest, and Rohrich Auto Group is the first to pilot Driver’s Advocate.

“In addition, dealers have the ability to use the loyalty point tracker as a way to encourage customers to return for their next vehicle purchase if they choose to apply the loyalty points towards a cash value for a down payment,” Grimes added.

According to nationwide consumer research conducted by EFG Companies, more than 65 percent of consumers desire reminders about their vehicle maintenance, and the majority would also like to receive service reminders and specials from their dealership.

The research also indicated 63.5 percent of respondents said the availability of a dealership loyalty program would impact their decision to service at a dealership. And according to the National Automobile Dealers Association, 83 percent of customers that perform their routine maintenance with the selling dealer will return to them to purchase another vehicle.  

“In today’s retail automotive market, the finance and insurance office of a dealership has the unique opportunity to take on a different role in addressing two significant dealer priorities,” EFG Companies president and chief executive officer John Pappanastos said.

“Through products like Driver’s Advocate, dealers can create those one-on-one consumer relationships to address individual needs rather than taking the mass approach,” Pappanastos continued. “In addition, these products have the potential to increase service drive volume and traffic, translating directly to repeat and referral business, which, as we all know, make up the lowest cost sales for the average dealer.”

Of the top mobile app attributes that EFG’s research showed consumers find most valuable, eight are available in the Driver’s Advocate app, including:

—Recall warnings
—Regular maintenance reminders
—Repair history
—Tire and wheel reminders
—Service interval reminders
—Contact information for warranties and roadside assistance
—Vehicle warranty or service contract details
—Service center locator.

In a world where, as reported by Cox Automotive, 70 percent of vehicle buyers never return to the dealership for maintenance, EFG Companies is convinced the mobile app will increase service drive retention by rewarding customers for their loyalty and keeping vehicle maintenance top-of-mind.

By providing consumers with instant access to their vehicle information and their protection plans through Driver’s Advocate, dealers also have the ability to enhance their customer service levels in the service drive.

“Using the app, a customer can pull relevant product and vehicle information for the service manager to put into their system, increasing the efficiency of initiating and processing claims,” said John Stephens, executive vice president at EFG Companies. “By streamlining claims processing in this way, dealers will be able to initiate work on the vehicle much faster, and get consumers back on the road, leading to a more satisfied consumer base.”

Lastly, the theft tracking feature is obviously useful for consumers, but also dealers before the sale.

“This opens several doors when it comes to inventory management,” Stephens said. “Dealers can track their inventory in real time, access test drive history and of course monitor for inventory theft.”

According to a 2016 study by the Insurance Information Institute and the Federal Bureau of Investigation, vehicle theft is on the rise. Officials said, 707,758 motor vehicles were reported stolen in the 2015, up 3.1 percent from 2014.

The Driver’s Advocate mobile app is based on the winning products for the 2015 and 2016 F&I Innovator of the Year competitions at Northwood University.

The winning concept from 2015 was originally designed by three Northwood undergraduate students to provide consumers with a convenient way to stay current on vehicle maintenance and prevent theft. The 2016 winning concept was designed to address Millennial and Generation Z concerns around financial security and deliver on dealership goals around customer retention.

According to a recent report by J.D. Power, millennials will nearly replace Baby Boomers in the car market by the year 2020. Driver’s Advocate addresses three concerns that are top of mind for this generation.

Saddled with $1.31 trillion in student loan debt, EFG Companies insisted this generation is hyper aware of taking on more debt. Using the point tracker, millennials have the ability to reduce or even eliminate their out-of-pocket expense in putting a down payment on their next vehicle.

By monitoring the status through a simple app, EFG went on to mention consumers can receive updates when their vehicle moves while they are not in it, as well as stay on top of vehicle maintenance to preserve resale value.

EFG and Northwood developed this program to spur a greater level of innovation in the F&I space to meet the rapidly evolving consumer demands. Every other year during Northwood’s fall semester, six teams of Northwood undergraduate automotive marketing and management students compete to conceptualize and build a new F&I product while earning course credit. The winning product is selected by a panel of judges based on its business merit and potential to be successfully developed for the retail automotive market.

“This marks the first competition product rolled out to the market,” Northwood University president Keith Pretty said.

“We expect great things from this product roll-out as it serves as a reflection of our philosophy of hands-on learning,” Pretty continued. “This will give our current students enrolled at Northwood the unique opportunity to see the impact their entrepreneurism and leadership can have on the industry.”

A percentage of the revenues generated from Driver’s Advocate will also be returned to Northwood University.

For more information, .



Fastlane gears up to enter independent, used-car dealer market

DALLAS - 

Fastlane recently announced it will enter the independent and used-car dealer market in January.

An e-commerce platform that gives automotive dealerships the ability to customize their online check-out processes, Fastlane facilitates an online car buying process that both showcases dealers’ available inventory and allows customers to acquire financing, service contracts and insurance.

With an initial focus on franchised dealership groups since its launch earlier this year, the company said it will enter the independent and pre-owned car dealership segment aggressively next year.

“We get numerous inquiries from independent and used-car dealers online and at trade shows, and now we have a product tailored and reasonably priced for these types of dealerships,” Fastlane vice president of sales David Luce said in a news release.

“There are nearly 30,000 independent dealerships in the U.S. market, representing 35-40 percent of the vehicles sold online. With online sales now being a key dynamic in the auto market, we believe our platform is uniquely positioned to help independent and used-car dealers stay competitive,” Luce continued.

Additionally, key tasks associated with the car buying process that Fastlane takes care of include: year, make, model, specifications and price information on each vehicle; warranty and service contract options; aftermarket product options; trade-in evaluations and accurate retail and lease payment information.

“We built Fastlane knowing that the online car-buying process typically differs from dealer to dealer and from region to region,” Fastlane chief executive officer Brandon Hall said. 

“Our technical teams work closely with each dealer to determine how their online car buying experience should work. Then we configure it to their satisfaction. It’s a win-win that makes online purchasing easy for car dealers and their customers,” he said.



Ally nominates 47 for TIME Dealer of Year

DETROIT - 

Ally Financial announced Monday that it has chosen 47 U.S. dealers as nominees for the 2018 TIME Dealer of the Year award.

Each year, the award recognizes several successful dealers who show a strong commitment to community service.

In addition to a $1,000 contribution from Ally for each dealer's charity of choice,  will be formally honored during a ceremony at the National Automobile Dealers Association's 2018 NADA Show on March 23 in Las Vegas where Meredith Long, TIME news, luxury and style senior vice president and general manager, will introduce this year's nominees.

“Only a small fraction of the roughly 16,500 franchise dealers across the country are nominated for this award each year, putting the nominees into an elite group of automotive leaders,” Ally auto finance president Tim Russi said in a news release.

“This year's nominees have proven they understand, care and 'do it right' for their communities by giving in ways that make a difference to those in need. We are honored to celebrate their incredible stories and hope their examples motivate others to give,” Russi continued.

As the exclusive sponsor of the award program for the past seven years, Ally has contributed nearly $600,000 to the TIME Dealer of the Year program, according to the company.

Additionally, this year’s nominees will also be featured on AllyDealerHeroes.com, which promotes the philanthropic contributions and achievements of the award honorees.

Past award winners include Swope Toyota, Van Bortel Motorcars, AutoFair Honda, Teague Auto Group, Michael Alford and Mike Shaw Automotive Group.



Study: Brochures remain valuable to car shoppers, more than social media

FARMINGTON HILLS, Mich. - 

While roughly 90 percent of car shoppers find printed brochures helpful when in search of their next vehicle, far fewer dealers feel the same, according to a recent study.

The Latcha+Associates' study that focuses on the car-shopping journey and the impact of marketing content such as printed brochures, found that just 32 percent of high-volume dealers and only 14 percent of low-volume dealers find printed brochures to be either extremely impactful or very impactful on driver's purchase decision.

Meanwhile, 61 percent of shoppers found them to be “somewhat helpful,” and 29 percent said they are “very helpful.”

After websites at 86 percent and automotive magazines at 30 percent, brochures are a top shopper touchpoint; 28 percent of shoppers report using a printed brochure, and 23 percent downloaded a brochure, according to the study.

Interestingly, the study also shows that at 26 percent, social media currently trails printed brochure popularity among shoppers.

Across gender and generation breaks, printed brochure utility is highly consistent as well. In addition to 88 percent of men and 91 percent of women, 88 percent of millennials, 89 percent of Gen X’ers and 94 percent of Baby Boomers said they find printed brochures either “somewhat helpful” or “very helpful.”

While printed brochures were found to be as important to dealers, many find printed brochures customized with dealer information beneficial, about six-in-ten salespeople (59 percent) that have seen customized brochures find them to be “very valuable.”

Additionally, among shoppers who have not used a printed brochure in your shopping experience, most said they were not offered one, (44 percent), followed by doesn’t help me compare vehicles (35 percent), and not enough detail available (27 percent).

When asked about what they think are the most important elements of printed brochures to shoppers, the study found that dealers feel brochures with information accompanying vehicle feature options, colors and drivers POV photos to carry the greatest value.

The most important printed brochure elements according to dealers include:

  1. Features and options, 55 percent
  2. Color and trim, 15 percent
  3. Specifications and dimensions, 14 percent
  4. Model line-up, 6 percent
  5. Photos, 6 percent
  6. Fuel economy, 4 percent

Latcha+Associates conducted its study comprised of focus groups, mobile surveys, phone interviews and in-person interviews with market research firm GfK.

“GfK used its vast experience and knowledge of location-based, mobile shopper marketing research to gather timely, relevant information on the impact of marketing content within the automotive purchase journey,” GfK executive vice president of consulting, automotive Dale Drerup explained in a news release introducing the study. “Combining that with Latcha's unrivaled automotive knowledge, we produced an objective, top-quality study detailing the different roles and value of marketing content throughout the in-market auto shopper’s path to purchase.”



Manheim invests $17M to grow retail recon operations

ATLANTA - 

Manheim has been investing $17 million to develop its retail reconditioning solution's proprietary technology platform and build new facilities, while upgrading existing ones.

In a news release, Manheim explained that its retail reconditioning solution is designed to help dealers increase efficiency and save time via offerings that include a 140-point retail inspection, mechanical and body reconditioning, detailing, merchandising, storage and transportation.

“Between saving time by outsourcing their retail reconditioning needs and freeing up their own service bays for paying customers, dealers can boost their profit on numerous fronts,” Manheim reconditioning vice president Angie Babin said in a news release.

“With the headwinds facing dealers today, any solution that can help them improve margins, manage greater capacity and turn cars faster is one that deserves serious consideration.”

While not replacing US Auto Sales’ centralized recon facility located in Lawrenceville, Ga., its marketing and business development director Neill Waters said Manheim’s retail reconditioning solution has become a dependable supplement.

“We buy a lot of vehicles in Orlando, Fla. We were shipping them all back to Georgia, reconditioning them, then sending some vehicles back down south to stores in South Georgia and Jacksonville, Fla.,” Waters explained in an email interview with AuSM.

“Our work with the Manheim Orlando facility allowed us to buy, recondition then ship direct to stores from the auction, ultimately reducing throughput days and logistics expense.”

Depending on client specifications and vehicle condition, dealers can generally expect a turn-around within four to 10 days, according to Manheim.

This year, the company said it has gotten more than 30,000 vehicles ready for retail for clients. These clients have included everyone from independent to franchise dealers, fleet operators and manufacturers.

Manheim has invested $9 million dollars in on-location operations, which includes  building out new facilities at three locations and adding new lifts, paint booths and imaging booths to other locations.

The remainder of the $17 million investment was invested in the solution’s proprietary technology platform, developed with Xtime, which allows dealers to receive real-time updates on their inventory, approve or deny work, manage transportation and track costs and invoicing, according to Manheim.

Manheim currently operates retail reconditioning locations across Florida; Illinois, Missouri, Michigan; Georgia; Texas; Colorado; California; Washington, D.C. and South Carolina.



Public dealer groups paying a premium to expand footprints

FORT LAUDERDALE, Fla. - 

If publicly traded dealer groups wanted to buy another rooftop, they had to open their checkbooks or dig deeper into their credit availability based on the figures shared in the Q3 2017 edition of the Haig Report released on Wednesday by Haig Partners.

For the year-to-date numbers ending Sept. 30, Haig Partners calculated publicly traded retailers had spent $935 million on dealerships in the U.S., an increase of 62 percent from the $578 million deployed during the same period in 2016.

The report pointed out that Lithia Motors was the most active of the publicly traded companies and continues to target underperforming large platforms in different parts of the U.S.

“Despite all the noise regarding the potential negative impact on auto dealerships from ride sharing, electrification, autonomous vehicles and changes to the franchise system, the "smart money" is still buying dealerships,” Haig Partners said.

The report also shared that the number of dealerships that sold in the U.S. through the first nine months of the year declined by 18 percent compared to the same period in 2016.

Haig Partners also computed profits at privately owned dealerships for the 12 months ending Sept. 30 were 3.8 percent lower than year end 2016 due to rising costs.

Values of privately owned dealerships fell 3.2 percent during this period, according to the Haig Report. Haig Partners' franchised blue sky multiples were mostly unchanged in Q3, with increased valuations for Subaru and Volkswagen only.

Continuing the trend from 2016, the report showed demand for dealerships shifted from luxury brands to domestic brands that are heavier in trucks and SUVs. Luxury dealerships accounted for 14 percent of acquisitions through Q3, down from 17 percent through Q3 of last year, and purchases of domestic stores increased to 50 percent through Q3 from 46 percent through Q3 2016.

Other key findings from the Q3 2017 Haig Report include:

—Macroeconomic indicators such as GDP, interest rates, employment, number of miles driven and consumer sentiment remain highly favorable for dealers.

—Other trends such as used-vehicle pricing, incentive spending by the OEMs, and rising inventories are growing less favorable to dealers.

—Fleet sales have fallen by 8.3 percent through October, although retail sales are almost flat from the same period in 2016.

—Declines in new and used gross profits per vehicle are being offset by gains in F&I and fixed operations.

—Sales and gross profits continue to increase at dealerships, but expenses are rising faster leading to earnings declines at many public and private dealers.

—The average dealership pre-tax profit during the last 12 months was $1.41 million

—Average estimated blue sky value per dealership dipped 3.2 percent from the end of 2016 to $6.8 million.

—Potential threats from autonomous cars, ride sharing, electrification and changes to franchise laws are so far having minimal to no impact on dealership values.

—Public auto retailers are spending more of their capital on acquiring auto dealerships in the U.S. than last year.

—Private equity firms and family offices continue to make substantial investments in auto retail.

“As we expected, the sharp drop in the first quarter of the year has been offset by strong second and third quarters and we are expecting robust conditions for the rest of the year,” Haig Partners president Alan Haig said. “There are many buyers and sellers in the market and deal financing remains readily available. These are good conditions for buy-sells, so long as sellers understand that their leverage is more limited than in the past.

“Buyers have many options and are increasingly concerned about future profits. They are less likely to chase deals or pay big premiums. If dealers want to sell their dealerships they will likely need to accept today’s offer since tomorrow’s offer could be lower,” Haig continued.

Haig Partners is seeing these conditions in its current engagements that include domestic, import and luxury dealerships that range from Florida to New York to California. The firm has closed dealership transactions with a value of more than $3.6 billion during the past 20 years.

The Haig Report is published each quarter and includes comprehensive data, analyses and opinions about the auto retail industry. Also included in each edition are Haig Partners' blue sky multiples that can serve as a gauge for franchise values.

To download the report,



RumbleOn appoints new senior VP of dealer services

CHARLOTTE, N.C. - 

RumbleOn announced Monday that it has named Peter Levy its new senior vice president of dealer services to oversee the development of the company’s dealer network and the rollout of its dealer-to-dealer Internet marketplace.

Over 25 years, Levy has taken on leading roles in sales, marketing and consulting at several technology-driven businesses, which include startups that capitalized on technology to gain market share, according to RumbleOn.

“We are excited to have Peter join our expanding team,” RumbleOn founder and chief executive officer Marshall Chesrown said in a news release.

“Given his impressive industry background, including his work at Integrated Auction Solutions, we believe he will make a significant and immediate contribution in our effort to, as a Company, create the most trusted brand and efficient online marketplace and distribution system in the recreational vehicle market," he said. 

At Integrated Auction Solutions, an independent auto auction simulcast provider, Levy held a senior management position, according to RumbleOn.

“I am very excited to be a member of the RumbleOn management team in supporting the rapid expansion of the Company,” added Levy. “I have spent many years in the information services industry, and I view RumbleOn as an opportunity second to none.”



3 primary factors pushing most active buy/sell dealership market ever

IRVINE, Calif. - 

Kerrigan Advisors determined dealerships not only are moving metal this year, but they’re also turning their entire operations at quite a clip, too.

The firm’s Blue Sky Report for Q3 2017 indicated the dealership buy/sell market is poised for its most active year ever with more than 200 transaction closings projected for 2017.

The report described a trio of factors driving market activity, including strong financial markets, well-funded investors and rising real estate values. The firm explained the pressures of a more challenging auto retail market, dropping margins and rising concerns about the impact of disruptive automotive technology on the traditional dealership business model are also having a major impact.

And, while blue sky values are slightly lower than their 2015 peak, and the overall industry is showing some stagnation, Kerrigan Advisors determined 2017 remains on track to be the third most profitable ever, driving more sellers to market and transaction values to record levels when including dealership real estate.

“Historic mega deals with complex ownership structures and multiple franchises are on the rise. These transactions are supported by a financial market that is willing and able to invest hundreds of millions of dollars in auto retail, despite some of the doomsday headlines about slowing sales,” said Erin Kerrigan, managing director of Kerrigan Advisors.

“Investors and financial institutions see an opportunity to participate in a decades-long auto retail consolidation game – one that they expect will produce winners and losers, particularly as technological innovations potentially change the dealership business model as we know it,” Kerrigan continued.

Other key data and analysis from the Q3 2017 Blue Sky Report includes:

—The Kerrigan Index is up 4.24 percent year to date and 608 percent from its 2009 recession lows.

—One hundred and fourty nine dealership buy/sell transactions were completed in the first nine months of 2017, according to Kerrigan Advisors’ research and The Banks Report, compared to 172 transactions in the first nine months of 2016. After hitting a plateau in 2015, buy/sell activity declined slightly in the first nine months of 2017, but is still tracking to be one of the most active years on record.

—Multi-dealership transactions represented one quarter of the completed sales in the first nine months of 2017. Kerrigan Advisors expects at least 51 multi-dealership transactions will close this year.

—Year to date, domestics’ share of the buy/sell market increased to 49 percent, up 18 percent from 2015.

—Non-luxury and luxury import franchises’ buy/sell market share declined.

—Public retailers’ U.S. acquisition spending increased 61 percent in the first nine months of 2017, compared to the first nine months of 2016.

—Private dealership groups represent the largest share of dealership acquirers. Of the estimated 236 franchises that changed hands in the first nine months of the year, only 23 were acquired by public companies.

—Real estate, for most dealers, is the most valuable asset, far exceeding franchise value. Kerrigan Advisors estimated dealership real estate prices rose 3 percent in the first nine months of the year.

The report identified three key trends shaping 2018’s buy/sell market and the remainder of 2017. Those trends included:

—The evolution of the dealership business model drives more sellers to market.

—Dealers are choosing to sell their real estate with their franchise.

—Captive finance companies play a critical role in acquisition financing.

“Our clients increasingly cite the risk factors associated with changes in auto retail as their single biggest reason for selling, with many believing auto retail will consolidate out of necessity, as only the largest, best-capitalized players will have the balance sheet to navigate auto retail’s evolution,” Kerrigan said.

“This is contributing to a very competitive buy/sell market, particularly for top franchises and attractive platforms and the growing population of well-funded buyers in the market,” she continued. “This creates a healthy market equilibrium — one where buyers and sellers agree on price and complete win/win transactions.

“Kerrigan Advisors believes this equilibrium will continue for the next several years and result in a highly active buy/sell market,” Kerrigan went on to say.

Kerrigan Advisors is deeply involved in the buy/sell market having advised on the sale of 60 dealerships, including four of the Top 100 dealership groups in the U.S. Most recently, Kerrigan advised on the sale of Puente Hills Chevrolet, in its recent sale to Pendragon PLC.

The Blue Sky Report, a Kerrigan Quarterly, is published four times a year and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. To download the Blue Sky Report, .



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