The number of Infiniti and Mazda franchises acquired in 2023 as part of dealership acquisitions increased, while fewer Honda and Toyota stores changed hands.
Infiniti, a lower-volume luxury brand, saw the number of franchises acquired in 2023 dealership transactions leap from the year before, according to Automotive News' tracking of buy-sell transactions across the U.S.
Eleven Infiniti franchises were part of buy-sell transactions last year, almost double the six in 2022 and triple the three in 2021, according to the Automotive News Research & Data Center. Infiniti had the highest share of its total U.S. franchises change hands last year, at 5.5 percent, Automotive News found.
Erin Kerrigan, managing director of Kerrigan Advisors, a dealership sell-side firm in Incline Village, Nev., said her 2023 Kerrigan Dealer Survey showed 56 percent of auto retailers thought the value of the Infiniti franchise would decline in the next 12 months. That was the second-highest percentage of predicted value decline for a franchise, only behind Lincoln. More than 650 dealers were surveyed from June through October last year.
She said dealers with franchises they aren't happy with increasingly are divesting those stores, realizing the earnings are declining at a faster rate than other brands.
"Dealers that own Infiniti are realizing that the franchise is probably not going to get better over time," Kerrigan said. "Its best profits were probably during the pandemic, and they do not want to own that franchise, so they are jettisoning that franchise at a higher rate."
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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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