Haig Partners released its Q3 2021 Haig Report, the industry’s quarterly report that tracks trends in auto retail and their impact on dealership values. Highlights include a significant spike in dealership profits and skyrocketing demand from dealership groups that want to acquire more stores.
These trends have driven record-shattering blue sky values for dealerships, the report said.
Key findings from the third quarter report include:
- The “Chipdemic” continues to create extraordinarily favorable conditions in auto retail
- Dealership profits are erupting, with the average privately-owned dealership making $3.4 million (excluding PPP) over the twelve-month period ending September 2021
- Buy-sell activity is at record levels, reaching 575 this year, a 24 percent increase over the previous record of 463 in 2015
- Blue sky values continue to shatter records, rising to an estimated 61 percent from the end of 2019
- Public company spending on U.S. auto acquisitions may reach $8 billion by year end 2021, which is 10-times pre-pandemic levels
- Public equity valuations are 108 percent higher than they were before the Chipdemic
“We are seeing plenty of dealers come to market to sell their stores. Profits are high, dealer confidence is high and interest rates remain low,” said Haig Partners founder Alan Haig. “The high value for stores today is stimulating dealers to consider exiting even if they are not at retirement age. Average single point dealerships are worth about $25 million all-in. Midsized groups are valued in the hundreds of millions of dollars. Large groups bring billions of dollars. At these values, dealers and their families are having conversations about the pros of remaining dealers, but also the risks and capital investments required if they remain dealers. We expect 2022 to be another excellent year for transactions.”
To learn more about findings from the Q3 2021 Haig Report, register here for the live Q&A with Alan Haig taking place Thursday, Nov. 18 at 1 p.m. ET.
Download the full third quarter Haig Report here.
