A dealer survey shows that out of all domestic brands, Ford’s dealers trust their brands the least.
Some would assume that a dealership franchise from a major automaker would have some sort of faith or trust in the brand they choose to sell. I mean, dropping millions of dollars just to sell a brand you don’t trust would be kind of crazy right? Apparently it’s not such a far fetched idea.
Automotive News reports that a dealer survey conducted by automotive sales side advisor firm Kerrigan Advisors shows that Ford dealers have very little trust in company that makes the brand they sell. Meanwhile Toyota dealers have the most trust in their brand.
From June to October 2023, 650 dealers across the country were anonymously surveyed in the fifth edition of Kerrigan’s annual dealer survey. The trust question made its debut this year, something Erin Kerrigan, the firm’s managing director told Auto News came about after the recent EV push. Ford came up as the least trusted brand according to its dealerships.
Forty-eight percent of dealers said they have no trust in Ford and Kerrigan Advisors found that outcome “consistent with the expectation of a decline in future Ford franchise profitability due to the OEM’s EV/future retailing strategy.”
Kerrigan Advisors thinks that the negative sentiment regarding Ford revealed in the findings could impact the franchise’s future blue sky values, which is the value of a dealership including goodwill.
Ford issued a statement to Automotive News responding to the survey, saying that its dealers are “important strategic partners and we are always listening and making adjustments. Working with our dealers, we have made recent beneficial changes to address dealer feedback and improve franchise value.” Nissan, Lincoln, Stellantis and Infiniti rounded out the top five that dealers trust the least after Ford.
Toyota’s dealers trust the brand the most, something Kerrigan says has to do with the brands strategy.
Dealers “trust that Toyota is not only going to do the right thing by producing the right vehicles for the consumer today, but it also will ensure that as the drivetrain changes and as the consumer’s way of interacting with the dealer changes, they’re going to continue to make this a win-win relationship for the OEM and the dealer,” Kerrigan said.
Kerrigan said things like “discontent ignited by EV strategies and too many EVs flooding dealership lots” and concerns about profitability related to over the air updates are driving the mistrust and skepticism for brands like Ford.
Kerrigan Advisors is the leading 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 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. The firm 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, accounting, finance and real estate, Kerrigan Advisors does not take listings, rather they 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 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®, which 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 monthly The Kerrigan Index™ composed 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 2023 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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