
Record-Breaking Dealership Transactions in 2024: What It Means for the Industry
The dealership buy/sell market has shattered previous records in 2024 with 330 transactions encompassing 544 franchise sales in just the first three quarters of the year. Kerrigan Advisors has highlighted this significant growth in their latest Blue Sky Report, indicating a dynamic shift driven by a surge in sellers and lucrative blue sky values.
Factors Fueling the Market Surge
Several factors have contributed to the heightened activity in the buy/sell market. Many sellers, encouraged by the wealth accumulated since the pandemic, have entered the market motivated by favorable post-tax sale proceeds. Additionally, larger dealership groups have been capitalizing on their financial prowess to expand their networks, making strategic acquisitions that align with their growth ambitions.
The Growing Influence of Top 150 Dealership Groups
The power of the Top 150 U.S. Dealership Groups cannot be overlooked, holding 30 percent of the industry's revenue by 2023, up from five percent in just five years. This exponential rise is primarily due to these groups targeting high-volume dealerships, leading to a significant market share increase. With current trends, these groups are on track to dominate over 50 percent of sales in the next 20 years, hinting at a major consolidation in the automotive dealership market.
The Future Landscape and Opportunities
Looking forward, industry experts like Erin Kerrigan anticipate that continued consolidation will reshape the landscape of auto dealerships. As high-value franchises grow increasingly targeted, the market may see more streamlined operations, refined customer experiences, and potential tax benefits for sellers.
Such developments present both challenges and opportunities for dealership owners and GMs. Navigating these changes will require strategic planning, strong financial management, and an adaptation to evolving market conditions to stay competitive and successful in this rapidly transforming field.
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