Dealership Values Jump

By Staff Writer June 10, 2021
Dealership public equity valuations are 98% higher than they were before the pandemic. Dealership public equity valuations are 98% higher than they were before the pandemic.

Dealership values jumped 197% year-over-year, reaching record-high levels, according to the Q1 2021 Haig Report, which tracks trends in auto retail and how they impact dealership values.

The record-level dealership profits are driving higher demand for dealerships. Average blue-sky value per rooftop has reached the highest values Haig Partners has recorded at an estimated $9.0M in Q1 2021, up 34% from 2019, and 11% from the end of 2020.

President of Haig Partners, Alan Haig. 

“We see an increasing number of dealers wanting to take advantage of current conditions to sell. And high prices are not the only reason some of the dealers have decided that now is the time to sell,” said Alan Haig, president of Haig Partners. “Dealers are aging, some have concerns that it may be increasingly difficult to compete with larger groups that can offer more choice and convenience to customers, and some want to sell before capital gains taxes go up.”

The massive increase in spending is attributable primarily to Lithia's acquisitions of stores in Florida and Arizona that totaled $383.5M. Haig Partners expect Lithia to continue its aggressive pace as it executes its plan to grow to $50B in revenue by the end of 2025. Private buyers are also active as they purchased about 80% of the dealerships that traded hands in Q1 2021.

Other key findings from the report include a lift in sales and a drop in production, which is creating unprecedented conditions in auto retail; blue sky values rose an estimated 10% from the end of 2020 and are now at record-high levels; public equity valuations are 98% higher than they were before the pandemic; average blue-sky value for a single-point dealership is $9M, the highest Haig Partners has reported.

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Last modified on Wednesday, 16 June 2021 10:45