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OEM Executives Exhibit Optimism for Franchise Dealerships
The latest Kerrigan OEM Survey reveals a pronounced optimism among automotive OEM executives regarding the future of franchise dealerships. As of 2025, an impressive 78 percent of participants foresee blue sky values either remaining steady or on the rise, signaling a notable shift from last year's outlook, where only 68 percent felt similarly. This newfound positivity not only reflects growing confidence but also suggests a resilient automotive retail sector adapting to contemporary challenges.
Strong Profitability Projections Indicate Dealer Resilience
One of the standout stats from the survey is the projected profitability within the dealership sector. Two-thirds of OEM executives surveyed anticipate steady or growing earnings for dealerships, a substantial increase from just 46 percent in 2024 and 31 percent in 2023. Such figures underscore a notable rebound and a strengthening sentiment towards dealership success within a dynamic market environment. Additionally, over half—52 percent—of respondents predict that gross margins will surpass pre-pandemic levels, suggesting a comeback in dealer profitability that many may not have expected following ongoing market fluctuations.
Dealers' Vital Role in Customer Engagement
Interestingly, as the sector evolves, the perspective regarding the role of dealers in customer relationships has not diminished. A remarkable 92 percent of OEM executives emphasize that dealerships will continue to play a critical role in managing customer data and interactions over the next five years. This statistic should reassure dealership owners that their position within the automotive landscape remains crucial and influential. Contrast this with two years ago, when 22 percent of executives believed OEMs would shift towards an agency model; that sentiment has plummeted to just 8 percent, signifying an apparent strengthening of dealerships' value and their enduring customer presence.
Anticipating the Future: Will Optimism Sustain?
While the optimism depicted in the Kerrigan OEM Survey paints a pleasant picture for the franchise dealership model, it's essential to consider potential challenges ahead. The sentiment was gauged before significant shifts regarding tariffs were initiated under the Trump Administration, suggesting that macroeconomic factors might still challenge these optimistic predictions. How dealerships adapt to these external pressures will likely dictate their success in capitalizing on the projected growth.
Conclusion: The Significance of Customer-Centric Strategies
As we move forward, dealership owners and GMs must prioritize customer-centric strategies to fortify their market positions. Understanding the evolving dynamics of customer relationships and leveraging the insights offered in the Kerrigan survey can foster robust growth and loyalty in the face of potential market changes. For dealership owners keen on sustaining this optimism, investing in personalized experiences and enriched customer engagements must become paramount.
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