The Blue Sky Report^®

The latest edition of The Blue Sky Report^® underscores the strength of dealership buy/sell activity in 2025, driven by sustained buyer demand amid a constrained supply of sellers. Supported by resilient dealership earnings and improved vehicle affordability fueling steady new vehicle demand, buyers remained highly acquisitive throughout the year, with a particular focus on tuck-in acquisitions to expand regional scale and operational efficiencies.

Key highlights of the report include:

• The pace of industry consolidation has nearly doubled relative to pre-pandemic levels, driven by stabilizing and, in some cases, rising dealership earnings that continue to support elevated buyer demand.
• A clear K-shaped dynamic emerged across franchises, with top-performing brands commanding stronger demand and valuations, while weaker brands experienced a high number of divestitures.
• The majority of acquirers in 2025 focused on expanding local market share, while smaller and mid-sized dealer groups increasingly pursued acquisitions to scale into the Top 150 Largest Dealership Groups, reinforcing the importance of size and regional density.
• Following the completion of the Asbury–Herb Chambers mega transaction, public dealership groups deployed a combined $4.4 billion to acquire nearly 80 franchises in 2025, the second-highest level on record, with remaining activity concentrated in existing markets and skewed toward import luxury, marquee assets.
• Blue sky multiple adjustments were limited to select franchises, with changes for Honda, Chevrolet, Ford, Buick GMC, Lexus, BMW, Cadillac  and Audi, reflecting brand-specific performance and buyer sentiment.

Specific trends also discussed in the latest Blue Sky Report^®:

• Consolidators prioritize revenue per rooftop, seeking to acquire higher volume dealerships.
• Growing dealership groups increasingly consider outside capital to accelerate consolidation.
• The timing of buyer due diligence is shifting to reflect broader M&A standards.