Haig Partners, which brokers dealership sales and acquisitions, said in its Q1 2021 Haig Report that dealership profits jumped 197 percent in Q1 2021 compared to Q1 2020, reaching record-high levels. The record-level dealership profits is driving higher demand for dealerships. Average blue-sky value per rooftop has reached the highest values Haig Partners has recorded at an estimated $9.0 million in Q1 2021, up 34 percent from 2019 and 11 percent from the end of 2020.
“Dealers have enjoyed the unprecedented bust-to-boom period for about a year now,” commented Alan Haig, president of Haig Partners. “The strong demand from consumers paired with a lack of supply from the OEMs has created a gusher of profits. No one could have predicted business conditions could be so good for dealers for so many months. Investors are optimistic about the outlook for our industry as every publicly traded retailer, franchised and used, saw its valuation skyrocket during the pandemic. Dealers large and small are equally bullish about our future. 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. 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.”
As published in the Q1 2021 Haig Report released by Haig Partners, buy-sell activity in the first quarter of 2021 surpassed pre-COVID levels and blue sky-values are now at record high levels. Public company spending continued to be strong in Q1 of this year with a total of $443M spent on domestic acquisitions, a 226 percent increase compared to Q1 2020.