Dealership Values Hit Record

By Staff Writer May 27, 2022

Due to record-high earnings, dealership blue sky values have reached new heights, according to Haig Partners LLC’s recently released Q1 2022 Haig Report.

The study tracks trends in auto retail and their impact on dealership values.

Buy-sell activity is off to a strong start in Q1 2022 with many private and public dealers looking to expand their networks. Retailers have not been hurt by recent economic headwinds such as higher interest rates, higher gas prices, higher inflation and declining GDP, demonstrating the strength of the auto retail business model.

“The first quarter of 2022 may bring auto dealers their highest profits ever. This is a uniquely good time to be an auto dealer,” shared Alan Haig, president of Haig Partners.

“It raises the question as to how much longer these conditions can last. Our math indicates that the level of pent-up demand is so high that it will take three or more years before consumers will be satisfied and we would return to a situation where supply and demand would be in balance again.

“During that time, dealers should enjoy profits that are elevated above the years before the pandemic and ‘chipdemic.’ Even so, there are risks on the horizon for dealers that include continued consolidation by the public retailers and The Agency Model being pushed from the OEMs.”

Rate this item
(1 Vote)
Last modified on Sunday, 05 June 2022 11:53