The votes of confidence are in, and it's not looking too good for Ford Motor Company. Kerrigan Advisors, a sell-side advisory firm that is known for its yearly Kerrigan Dealer Survey asked the 650 dealers polled this year the car companies they have the most confidence in and Ford came in dead last with 48% saying they have no trust in the Blue Oval.
Conversely, Toyota came away with the top marks, with a massive 72% of the dealers asked saying they have a high level of trust in the automaker. The survey is in its 5th year and was designed this year to "gauge dealer sentiment on the future value of their business, growth plans, earnings expectations, as well as perspectives on franchise values and their trust levels in the OEMs." It's the first year the company decided to ask the dealers about their levels of trust, and it's proven to be an eye-opening decision.
Kerrigan says this lack of trust is "consistent with the expectation of a decline in future Ford franchise profitability due to the OEM's EV/future retailing strategy." In line with this, 58% of dealers also said they believe Ford's planned changes to their dealership model will negatively impact future franchise profitability and value.
It seems like Ford's plans to move away from the classic dealership structure and closer to a straight factory-to-customer one haven't gone over well with dealers, even if it has been easier for buyers to get their hands on F-150s and Broncos. Thanks to all this negativity, 46% of dealers said they believe Ford franchises will decrease in value over the next 12 months.
The next four least trusted car companies are Nissan, Lincoln, Chrysler/Jeep/Dodge/Ram, and Infiniti. On the opposite end, after Toyota, you have Lexus, Subaru, Honda, and Porsche as the most trustworthy brands.
As a brand known for its quality and commitment to its customers, it's no surprise that Toyota is sitting at the top. Erin Kerrigan, Kerrigan Advisory's managing director, spoke with Automotive News regarding the survey and said that demand for new dealerships is monumental as sales are strong thanks to the brand's varied approach to the electric future.
"[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.
Dealers simply don't have the same faith in Ford's plan as they do in Toyota's, and this doesn't come as a surprise when you have Ford dealers suing their own parent company to fight new EV sales requirements. Ford wanted to move away from the classic dealership model, and that has been profitable, but we imagine these negative dealer views are only going to gain steam in future years.
In a statement, Ford said 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."
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 275 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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