SUCCESSFUL DEMAND GENERATING RECORD PROFITS FOR DEALERS
- The Chipdemic continues to create extraordinarily favorable conditions in automotive retail
- The average public concessionaire made $7.1M at LTM Q1 2022, 10% more than at the end of 2021
- Spending by public companies on auto acquisitions in the United States has been $588 million in Q1 2022, 35% more than in Q1 2021
- Public equity valuations are 100% higher than they were before the pandemic
- Average blue sky values are up about 117% from the end of 2019 and are at record highs
- Current general economic indicators have little impact on the auto retail industry as pent-up demand generates record profits for dealerships
- The near-to-medium term outlook for dealerships looks bright, but threats such as further consolidation, electric vehicles and the “agency model” are emerging
“The first quarter of 2022 could bring auto dealers their highest profits ever. This is an especially good time to be an auto dealer,” shared Alan Haig, Chairman of Haig Partners. “This raises the question of how long these conditions can last. Our calculations indicate that the level of pent-up demand is so high that it will take three years or more before consumers are satisfied and we return to a situation where supply and demand would once again be in balance. During this time, dealers are expected to enjoy higher profits than the years before the pandemic and microchip. Even so, there are risks on the horizon for dealers, including the further consolidation by state-owned retailers and “the agency model” is being pushed by OEMs,” he continued.
For more findings from the Haig Q1 2022 report and the impact of consolidation on automotive retailing, register for the upcoming NADA webinar, “The Future of Automotive Retailing and How Tomorrow Is Impacting Business buy-sell today”, which will take place on June 8and.
Download the full Haig Q1 2022 report at www.haigparners.com/haig-report.
About the Haig Report
The Haig Report, the industry’s leading quarterly report that tracks automotive retailing trends and their impact on dealer values, includes automotive dealer performance data and analysis, discusses notable events impact on the automotive retail industry, identifies trends in the M&A market for dealerships, provides guidance on estimated value ranges for different franchises, and shares insights for the buy-sell market automotive retail. The Haig report is based on data collected from reputable public sources and interviews with dealer groups and dealerships, bankers, attorneys and accountants specializing in automotive retail.
About Haig Partners
Haig Partners LLC helps dealers maximize the value of their businesses. They have unrivaled experience working with the leaders of large retail groups and financial institutions and have advised the purchase or sale of more than 560 dealers totaling $8.5 billion. The Haig Partners team leverages expertise and relationships to guide clients through a confidential and customizable sales process, successfully securing the best price. They are the author of the Haig Report, the industry’s leading quarterly report that tracks automotive retailing trends and their impact on dealer values, and are co-authors of the NADA guide, “Buying and Selling a Dealership”. For more information, visit www.haigpartners.com.
Director of Marketing and Business Development
SOURCE Haig Partners