The automotive industry has seen a surge in dealership sales in recent years, driven by a number of factors including the increasing popularity of online car buying, the consolidation of the industry, and the rise of electric vehicles. In 2021, a record number of dealerships were sold in the United States, with over 1,000 transactions taking place. This trend is expected to continue in the coming years, as more and more dealers look to sell their businesses.

There are a number of reasons why dealerships are selling. Some owners are retiring, while others are looking to cash out on the high valuations that dealerships are currently fetching. The consolidation of the industry is also playing a role, as larger dealership groups are acquiring smaller ones in order to gain market share. Additionally, the rise of electric vehicles is creating uncertainty for some dealers, who are concerned about the impact that EVs will have on their business.

automotive news dealerships sold

Dealerships changing hands.

• Rising sales trend
• Dealers cashing out
• Industry consolidation
• EV impact uncertainty

The future of dealerships remains uncertain, but the current trend of dealership sales is likely to continue in the coming years.

Rising sales trend

The rising sales trend of dealerships is being driven by a number of factors.

• Online car buying: The increasing popularity of online car buying has made it easier for consumers to shop for and purchase vehicles from anywhere in the country. This has led to an increase in the number of people buying cars from out-of-state dealerships, which has in turn driven up dealership sales.
• Dealership consolidation: The automotive industry is undergoing a period of consolidation, with larger dealership groups acquiring smaller ones in order to gain market share. This consolidation is being driven by a number of factors, including the increasing cost of operating a dealership, the need to invest in new technology, and the desire to achieve economies of scale. As a result of this consolidation, the number of dealerships in the United States has been declining in recent years.
• Rise of electric vehicles: The rise of electric vehicles (EVs) is also having an impact on dealership sales. Some dealers are concerned about the impact that EVs will have on their business, as EVs require less maintenance and repairs than traditional gasoline-powered vehicles. However, other dealers see EVs as an opportunity to grow their business, as they can offer consumers a new and exciting product.
• High valuations: Dealerships are currently fetching high valuations, which is making it attractive for owners to sell their businesses. This is due in part to the strong demand for dealerships from larger dealership groups, as well as the low interest rates that are currently available.

The rising sales trend of dealerships is expected to continue in the coming years, as more and more owners look to cash out on the high valuations that dealerships are currently fetching.

Dealers cashing out

A number of factors are driving dealers to cash out of their businesses.

• Retirement: Many dealership owners are reaching retirement age and are looking to sell their businesses in order to enjoy their retirement years. This is especially true for dealers who have been in the business for many years and have built up a substantial amount of equity in their dealerships.
• High valuations: Dealerships are currently fetching high valuations, which is making it attractive for owners to sell their businesses. This is due in part to the strong demand for dealerships from larger dealership groups, as well as the low interest rates that are currently available. As a result, many dealers are able to sell their businesses for a significant profit.
• Changing industry landscape: The automotive industry is undergoing a period of rapid change, with the rise of electric vehicles, the increasing popularity of online car buying, and the consolidation of the industry. Some dealers are concerned about the impact that these changes will have on their businesses and are therefore choosing to sell their dealerships while they still can.
• Desire for a new challenge: Some dealers are simply looking for a new challenge and are ready to move on to something else. They may have been in the dealership business for many years and are ready for a change of pace. Others may have other business interests that they want to focus on.

The trend of dealers cashing out of their businesses is expected to continue in the coming years, as more and more owners reach retirement age and look to sell their dealerships.

Industry consolidation

The automotive industry is undergoing a period of consolidation, with larger dealership groups acquiring smaller ones in order to gain market share.

• Economies of scale: Larger dealership groups are able to achieve economies of scale by sharing resources and costs across their multiple dealerships. This allows them to operate more efficiently and profitably than smaller dealerships.
• Increased market power: Larger dealership groups have more market power than smaller dealerships. This allows them to negotiate better deals with manufacturers and suppliers, and to charge higher prices for their vehicles and services.
• Access to capital: Larger dealership groups have better access to capital than smaller dealerships. This allows them to invest in new dealerships, new technologies, and new marketing initiatives.
• Changing consumer preferences: Consumers are increasingly shopping for cars online and are willing to travel further to find the best deal. This is making it more difficult for smaller dealerships to compete, as they are less likely to be found by consumers who are searching online.

The trend of industry consolidation is expected to continue in the coming years, as larger dealership groups continue to acquire smaller ones. This will lead to a decrease in the number of dealerships in the United States, but it will also make the remaining dealerships more profitable.

EV impact uncertainty

The rise of electric vehicles (EVs) is creating uncertainty for some dealers, who are concerned about the impact that EVs will have on their business. EVs require less maintenance and repairs than traditional gasoline-powered vehicles, which could lead to a decrease in revenue for dealerships. Additionally, some dealers are concerned that EVs will eventually replace gasoline-powered vehicles altogether, which could put them out of business.

However, other dealers see EVs as an opportunity to grow their business. EVs are becoming increasingly popular with consumers, and dealers who are able to adapt to the changing market will be well-positioned to succeed. Dealers can prepare for the impact of EVs by investing in EV charging stations, training their technicians to service EVs, and developing marketing campaigns that target EV buyers.

It is still too early to say what the long-term impact of EVs will be on dealerships. However, it is clear that EVs are having a significant impact on the automotive industry, and dealers need to be prepared for the changes that are coming.

Some of the specific ways that EVs could impact dealerships include:

• Reduced service revenue: EVs require less maintenance and repairs than traditional gasoline-powered vehicles. This could lead to a decrease in revenue for dealerships’ service departments.
• Increased competition: As EVs become more popular, more dealerships will start selling them. This could lead to increased competition for customers and lower profit margins.
• Changing consumer preferences: Consumers who purchase EVs are often more environmentally conscious and tech-savvy than traditional car buyers. This could lead to changes in the way that dealerships market and sell vehicles.

Dealers who are able to adapt to the changing market and embrace EVs will be well-positioned to succeed in the future. However, dealers who are slow to adapt may find themselves struggling to compete.

FAQ

Here are some frequently asked questions about automotive news dealerships sold:

Question 1: Why are so many dealerships being sold?

Answer 1: There are a number of factors driving the sale of dealerships, including the rising sales trend, dealers cashing out, industry consolidation, and the impact of electric vehicles.

Question 2: Who is buying dealerships?

Answer 2: Larger dealership groups are the primary buyers of dealerships. These groups are able to achieve economies of scale, increased market power, and access to capital, which allows them to operate more efficiently and profitably than smaller dealerships.

Question 3: What is the impact of electric vehicles on dealership sales?

Answer 3: The impact of electric vehicles on dealership sales is still uncertain. Some dealers are concerned that EVs will lead to a decrease in revenue from service and repairs. However, other dealers see EVs as an opportunity to grow their business by targeting environmentally conscious and tech-savvy consumers.

Question 4: What should dealers do to prepare for the impact of electric vehicles?

Answer 4: Dealers can prepare for the impact of electric vehicles by investing in EV charging stations, training their technicians to service EVs, and developing marketing campaigns that target EV buyers.

Question 5: What are the benefits of selling a dealership?

Answer 5: The benefits of selling a dealership include the ability to cash out of the business, reduce the risk of ownership, and gain access to new capital.

Question 6: What are the risks of selling a dealership?

Answer 6: The risks of selling a dealership include the loss of control over the business, the potential for a lower sale price than expected, and the need to find a qualified buyer.

Question 7: How can I find a qualified buyer for my dealership?

Answer 7: You can find a qualified buyer for your dealership by working with a reputable business broker or by advertising the dealership for sale in industry publications.

Closing Paragraph: If you are considering selling your dealership, it is important to carefully weigh the benefits and risks involved. You should also consult with a qualified business broker to help you find a qualified buyer and negotiate the best possible price for your dealership.

In addition to the information provided in the FAQ, here are some additional tips for dealers who are considering selling their business:

Tips

Here are some practical tips for dealers who are considering selling their business:

Tip 1: Hire a qualified business broker.

A qualified business broker can help you value your dealership, find a qualified buyer, and negotiate the best possible price for your business. A good business broker will have experience in the automotive industry and will be familiar with the current market conditions.

Tip 2: Prepare your dealership for sale.

This includes getting your financial records in order, making any necessary repairs or upgrades to your dealership, and developing a marketing plan to attract potential buyers. You should also be prepared to provide potential buyers with detailed information about your dealership, including your sales volume, profit margin, and customer satisfaction ratings.

Tip 3: Be realistic about your asking price.

Your asking price should be based on a realistic assessment of the value of your dealership. If you price your dealership too high, you will scare away potential buyers. However, if you price your dealership too low, you will leave money on the table.

Tip 4: Be prepared to negotiate.

Once you have found a qualified buyer, you will need to be prepared to negotiate the terms of the sale. This includes the purchase price, the closing date, and any other contingencies. It is important to be flexible and willing to compromise in order to reach an agreement that is satisfactory to both parties.

Closing Paragraph: Selling a dealership can be a complex and time-consuming process. However, by following these tips, you can increase your chances of finding a qualified buyer and getting the best possible price for your business.

In conclusion, the automotive dealership industry is undergoing a period of significant change. Dealers who are able to adapt to the changing market and embrace new technologies will be well-positioned to succeed in the future. However, dealers who are slow to adapt may find themselves struggling to compete.

Conclusion

The automotive dealership industry is undergoing a period of significant change. A number of factors are driving this change, including the rising sales trend, dealers cashing out, industry consolidation, and the impact of electric vehicles.

Summary of Main Points:

• Dealership sales have been rising in recent years, driven by factors such as the increasing popularity of online car buying, the consolidation of the industry, and the rise of electric vehicles.
• Many dealers are cashing out of their businesses, taking advantage of the high valuations that dealerships are currently fetching.
• The automotive industry is undergoing a period of consolidation, with larger dealership groups acquiring smaller ones in order to gain market share.
• The rise of electric vehicles is creating uncertainty for some dealers, who are concerned about the impact that EVs will have on their business.

Closing Message:

The future of dealerships remains uncertain. However, dealers who are able to adapt to the changing market and embrace new technologies will be well-positioned to succeed in the future. Dealers who are slow to adapt may find themselves struggling to compete.

The sale of dealerships is a complex and ever-changing landscape. Dealers who are considering selling their business should carefully weigh the benefits and risks involved and consult with a qualified business broker to help them get the best possible price for their dealership.