More than three-quarters of survey respondents expect EV sales to negatively affect dealership profitability in 2025.
Auto dealers are maintaining a positive outlook on the value of their businesses for 2025, despite an increasingly mixed sentiment regarding profits and franchise performance, according to the newly released 2024 Kerrigan Dealer Survey.
The survey, which collected responses from more than 635 auto dealers, revealed 51% of respondents believe dealership valuations will remain elevated, with an additional 17% anticipating further increases.
This optimism comes even as dealership profits begin to stabilize after the record highs of recent years.
“Despite a moderation in profits, auto dealer sentiment remains upbeat on 2025’s valuations, directly impacting acquisition activity in the coming year,” said Erin Kerrigan, founder and managing director of Kerrigan Advisors.
One of the most striking findings of the survey is the concern surrounding new electric vehicle (EV) sales. A significant 77% of dealers expect EV sales to negatively affect profitability in 2025, citing challenges such as higher costs and an evolving consumer base.
In contrast, hybrid vehicle sales and parts and service operations are seen as key growth drivers, with 77% and 75% of respondents, respectively, expecting these areas to boost earnings.
Dealer sentiment toward specific franchises also varied widely. Toyota and Lexus emerged as the most trusted and sought-after franchises, with 83% and 76% of respondents expressing high trust in the brands.
“Toyota and Lexus are by far the most requested brands in our Buyer Database and in this year’s survey,” noted Ryan Kerrigan, managing director of Kerrigan Advisors.
These brands’ strategies in inventory management, EV development and network size are seen as particularly attractive.
Conversely, Stellantis brands like Chrysler, Dodge, Jeep and Ram (CDJR) and Nissan saw significant trust declines, with 72% of respondents indicating no trust in CDJR -- a record-high figure for the survey. More than 64% of respondents also expect CDJR, Infiniti, Lincoln and Nissan franchises to decrease in value over the next 12 months.
Acquisition trends point to continued consolidation in the industry. Nearly half (49%) of dealers surveyed plan to add one or more dealerships to their portfolio in 2025, up slightly from 47% in 2024. Meanwhile, the percentage of dealers planning to sell has risen to 7%, reflecting a small but growing segment concerned about declining profits.
“The industry’s view that scale will be crucial in the evolving auto retail landscape is driving enterprises to either expand or sell as consolidation continues,” Erin Kerrigan said.
The findings are based on anonymous survey responses from franchised auto dealers in Kerrigan Advisors’ proprietary dealer database. Data was collected between June and November 2024 and analyzed in conjunction with the issuance of The Blue Sky Report®.
Kerrigan Advisors is the leading exclusive sell-side advisor and thought partner to auto dealers nationwide. Since its founding in 2014, the firm has led the industry with the sale of over 280 auto dealerships representing $9 billion in client proceeds, including the third largest transaction in auto retail history – the sale of Jim Koons Automotive Companies to Asbury Automotive Group. Kerrigan Advisors advises the industry’s leading dealership groups, enhancing value through the lifecycle of growing, operating and, when the time is right, selling their businesses. Led by a team of veteran industry experts with backgrounds in investment banking, private equity, consulting, accounting, finance and real estate, we not take listings nor do we employ a brokerage model; rather we develop a customized sales approach for each client to achieve their personal and financial goals. In addition to the firm’s sell-side advisory services, Kerrigan Advisors also provides a suite of automobile dealership consulting and investor services including growth strategy, market valuation assessments, capital allocation, transactional due diligence, open point proposals, operational improvement and real estate due diligence.
Kerrigan Advisors monitors conditions in the buy/sell market and publishes an in-depth analysis each quarter in The Blue Sky Report®, the industry authority on dealership buy/sell market trends and valuations and includes Kerrigan Advisors’ signature blue sky charts, multiples and analysis for each franchise in the luxury and non-luxury segments. To download a preview of the report, click here. The firm also releases The Kerrigan Index™ comprised of the seven publicly traded auto retail companies with operations focused on the US market. The Kerrigan Auto Retail Index is designed to track dealership valuation trends, while also providing key insights into factors influencing auto retail. To access The Kerrigan Index™, click here. To read the 2024 Kerrigan Dealer Survey, click here. To read the 2024 Kerrigan OEM Survey, click here. Kerrigan Advisors also is the co-author of NADA’s Guide to Buying and Selling a Dealership.
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