Transactions of dealerships are expected to continue at a strong volume this year, Automotive News reported, citing firms that specialize in such deals, as well as dealer groups.
The publication indicated a comparable number of deals to the previous two years' volume should take place, regardless of foreseen economic pressures, such as continued inflation, rising interest rates and the specter of a recession. That’s because many dealers are sitting on large amounts of cash after making healthy pandemic-era profits.
One buy-sell firm executive told Automotive News that every big player plans to purchase this year.
Meanwhile, large dealer groups have signaled they’re looking to buy, including Lithia Motors, whose CEO said it must buy up to 150 dealerships by the close of 2025 to reach its annual revenue goal.
The publication reported that Florida buy-sell firm Haig Partners estimates more than 660 dealerships could trade hands annually through 2025 to help three public vehicle retailers reach revenue goals. The publication estimates that at least 568 dealerships sold last year, not including four public dealer groups that haven’t yet reported year-end results.