Digital Dealer - July 2019 - 14
D E A L E R OP S & M ANAGEM ENT: Bu y/Sel l
By RYAN KERRIGAN
Managing Director,
Kerrigan Advisors
Is the Sky Falling
for the Buy/Sell
Market? We
Don't Think So.
In recent months,
industry articles and
editorials have suggested
that the long bull run in the
buy/sell market has come
to an end. We beg to differ.
In fact, these recent
opinions are not backed by
data. In the first quarter of
2019, transaction activity
actually rose 39% over
2018 (See Chart 1). And,
the number of multi-franchise transactions
14
J U LY 2 0 1 9
remained high at 14 (See
Chart 2). These are not
signs of a slowing marketplace.
Clearly, dealers today
are facing a tougher operating environment versus
the halcyon days preceding 2016 when SAAR was
growing at an average
annual rate of 7.5%.
Today, monthly SAAR is
flat or declining, costs are
up and interest rates have
D I G I TA L D E A L E R . C O M
ticked up from record lows.
But, that is not the whole
story. Average dealership
revenue and profits remain
near record highs and
overall industry health
remains solid.
For many dealers,
March and April were the
best months of operating
performance in years.
Dealers have shifted their
focus from new car sales
to other, more resilient
parts of the dealership
business model. Those
dealers who have grown
used, F&I, parts and
service have fared very
well during this period of
declining new car sales.
From our vantage point,
these good operators who
have shifted their focus
are thriving. In fact, some
strong dealers have more
cash in the bank than
they could possibly ever
spend. They are opportunistically buying stores,
and in some cases, biding
their time to see how the
macro-economic cycle
plays out. These operators
are focused on expense
control as a result of low
topline growth and the lower margins associated with
the new car department.
And, as always, they are
growing the countercyclical parts of the auto retail
business model.
While some investors
and operators are worried
about the sales downturn,
recall that auto retail generally bounces back very
quickly. The best example
of this is how dealers
brought down expenses
rapidly in reaction to the
financial crisis of late
2008, remaining profitable,
and even increasing net
to sales over prior years
(See Chart 3). Auto retail
quite simply is a resilient
industry.
In our experience,
the transaction environment remains active and
healthy, with transaction
volumes up year over year
(See Chart 1). Valuations
are high, particularly when
http://www.DIGITALDEALER.COM
Digital Dealer - July 2019
Table of Contents for the Digital Edition of Digital Dealer - July 2019
Digital Dealer - July 2019
A Message from the Show Director
Are You a Critic or a Coach?
Implementing an Effective Spend Management Function
Leading with Purpose – Part II
Technical Knowledge Is Essential, Get Some, & Then Close the Purchase!
Is the Sky Falling for the Buy/Sell Market? We Don’t Think So.
How to Ensure a Well-Rounded, Healthy Dealership
Interview with DCH Paramus Honda
Social Selling Tip: 5 Steps to Making Powerful Video Testimonials
Dealerships Tapping into the Power of VIN-Specific Marketing
Future of Luxury Market in the Automotive Industry
A Dealership on the Road to 10,000 Online Reviews: What I’ve Learned…
Creative is King!
4 Sad Ways a Dealer's Digital Marketing Money Gets Wasted
An Open Letter to Service Directors: Selling Your Way to Success
How Digital Retail Solutions Can Enhance Your Expertise
The Real Cost Per Lead, Wasted Spend, & How to Boost ROI with CRM
Digital Dealer - July 2019 - Digital Dealer - July 2019
Digital Dealer - July 2019 - Cover2
Digital Dealer - July 2019 - 1
Digital Dealer - July 2019 - A Message from the Show Director
Digital Dealer - July 2019 - 3
Digital Dealer - July 2019 - Are You a Critic or a Coach?
Digital Dealer - July 2019 - 5
Digital Dealer - July 2019 - Implementing an Effective Spend Management Function
Digital Dealer - July 2019 - 7
Digital Dealer - July 2019 - 8
Digital Dealer - July 2019 - Leading with Purpose – Part II
Digital Dealer - July 2019 - 10
Digital Dealer - July 2019 - 11
Digital Dealer - July 2019 - Technical Knowledge Is Essential, Get Some, & Then Close the Purchase!
Digital Dealer - July 2019 - 13
Digital Dealer - July 2019 - Is the Sky Falling for the Buy/Sell Market? We Don’t Think So.
Digital Dealer - July 2019 - 15
Digital Dealer - July 2019 - 16
Digital Dealer - July 2019 - 17
Digital Dealer - July 2019 - How to Ensure a Well-Rounded, Healthy Dealership
Digital Dealer - July 2019 - 19
Digital Dealer - July 2019 - 20
Digital Dealer - July 2019 - 21
Digital Dealer - July 2019 - Interview with DCH Paramus Honda
Digital Dealer - July 2019 - 23
Digital Dealer - July 2019 - 24
Digital Dealer - July 2019 - 25
Digital Dealer - July 2019 - 26
Digital Dealer - July 2019 - 27
Digital Dealer - July 2019 - 28
Digital Dealer - July 2019 - 29
Digital Dealer - July 2019 - 30
Digital Dealer - July 2019 - 31
Digital Dealer - July 2019 - Social Selling Tip: 5 Steps to Making Powerful Video Testimonials
Digital Dealer - July 2019 - 33
Digital Dealer - July 2019 - 34
Digital Dealer - July 2019 - 35
Digital Dealer - July 2019 - Dealerships Tapping into the Power of VIN-Specific Marketing
Digital Dealer - July 2019 - 37
Digital Dealer - July 2019 - A Dealership on the Road to 10,000 Online Reviews: What I’ve Learned…
Digital Dealer - July 2019 - 39
Digital Dealer - July 2019 - Creative is King!
Digital Dealer - July 2019 - 4 Sad Ways a Dealer's Digital Marketing Money Gets Wasted
Digital Dealer - July 2019 - 42
Digital Dealer - July 2019 - An Open Letter to Service Directors: Selling Your Way to Success
Digital Dealer - July 2019 - 44
Digital Dealer - July 2019 - How Digital Retail Solutions Can Enhance Your Expertise
Digital Dealer - July 2019 - 46
Digital Dealer - July 2019 - The Real Cost Per Lead, Wasted Spend, & How to Boost ROI with CRM
Digital Dealer - July 2019 - 48
Digital Dealer - July 2019 - Cover3
Digital Dealer - July 2019 - Cover4
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