Despite concerns about electric vehicles and Tesla’s growing market share, dealership profits and cash flow are high, boosting confidence in the future of retailing, Erin Kerrigan, managing director of Kerrigan Advisors, a sell-side firm in Irvine, Calif., told Automotive News.
“The dealers are making more money than they have — frankly many have shared with us [it’s more] than they ever imagined they would in a single year,” Kerrigan said. “And the vast majority plan to invest those dollars in more acquisitions, not taking this moment to say, ‘OK, I’m going to sell because I’m at peak profits,’ but rather I’m going to pour these profits back into this industry.”
Kerrigan Advisors, in another report, said the average blue-sky value — or the intangible value of a dealership, including goodwill — hit a record $9.1 million in the second quarter. That topped the previous high of $8.5 million reached in the first quarter, Kerrigan Advisors said.
