Chinese automakers are rapidly expanding, leaving dealers to question whether this poses a threat or an opportunity for the U.S. market. In today’s episode of Inside Automotive, we are joined by two esteemed guests: Ryan Kerrigan, Managing Director of Kerrigan Advisors, and Michael Dunne, CEO of Dunne Insights and host of the Driving with Dunne podcast. Their automotive industry expertise will provide valuable insights into the implications of this growth in Chinese commerce.
The interview begins with acknowledging the increasing presence of Chinese automakers on the global stage. Kerrigan points out that although Chinese cars are not yet prevalent on U.S. roads, the country has positioned itself as the largest producer and exporter of vehicles worldwide. He emphasizes that as Chinese manufacturers look to dominate international markets, their strategies will inevitably affect the U.S. automotive sector, potentially disrupting the landscape for established players like the Detroit Three and Japanese OEMs.
Dunne highlights the current U.S. government stance, including the imposition of 100% tariffs on certain Chinese imports, underscoring China’s competitive threat. He anticipates that while direct competition may be on the horizon, a significant entry into the U.S. market won’t materialize until around 2026, contingent upon the political landscape.
The experts discuss potential strategies for Chinese automakers to enter the U.S. market, such as local assembly and partnerships with existing manufacturers. Notably, they mention BYD as a key player, having scaled from 400,000 cars to 4 million in just four years. The conversation underscores that, while American consumers may hesitate about Chinese brands, compelling price points—averaging $19,000 compared to the typical U.S. new car price of approximately $47,000—could quickly sway opinions.
Kerrigan and Dunne agree that the evolution of this competition is inevitable, with profound implications for the future of the U.S. automotive industry.
"The average value of a car exported from China this year is $19,000, while the average price of a new car in the United States is around $47,000. The Chinese are looking at the U.S. and saying, 'Boy, would we have a field day there.'" — Michael Dunne
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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