Dealerships across the country are undergoing a major transformation as automakers push for upgraded showrooms, service areas, and customer spaces. These renovations aren’t just about aesthetics—they’re crucial for staying competitive in an industry rapidly shifting toward electric vehicles (EVs) and evolving customer expectations.
Modern, customer-friendly facilities are becoming a must for dealerships, especially as brands roll out new standards and guidelines. While these upgrades come with a hefty price tag, they are seen as necessary investments for long-term success. Dealerships that embrace these changes will be better positioned to meet the needs of today’s tech-savvy and eco-conscious buyers, while also preparing for future challenges in the automotive market.
However, not all dealers are willing or able to make these significant investments. Erin Kerrigan, managing director of Kerrigan Advisors, notes that, “Especially for many that are at a retirement age, they are instead deciding to sell their business rather than spend millions of dollars conforming their facilities to the latest and greatest image.” This highlights a key challenge for the industry: while some dealers are embracing change, others are opting out, which could lead to further consolidation in the marketplace.
In short, the dealership construction boom is a sign that businesses need to adapt to stay ahead in a fast-changing industry. Whether through significant investment or strategic exits, the future of automotive retail will demand new approaches to facility design and customer engagement.
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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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