In addition to duking it out over 2024 recalls, Stellantis seems to have overtaken Ford in yet another unsavory battle. According to Kerrigan Advisors' latest dealership sentiment survey, individual dealerships view the combined Chrysler-Dodge-Jeep-Ram (CDJR) brand as less trustworthy than any other, taking away the Blue Oval's previous-year top honors. Despite high demand for vehicles like the Jeep Wrangler 4xe, retailers have little faith in Stellantis' most popular brands in the US due to executive-level instability and fluctuating dealer supplies.
The issue of retailer trust is a complicated one. Kerrigan Advisors enlists more than 635 dealers to participate in an anonymous survey that asks them to rate auto manufacturers in terms of how much confidence they have that the franchises will be profitable. If a particular brand suffers from too little dealer confidence, some of those locations may close, which would ultimately harm sales for the manufacturer. Unlike consumer-oriented studies from the likes of JD Power, Kerrigan's confidence metric evaluates the sometimes complex relationship between the manufacturer and retailer.
In last year's study, 39 percent of respondents said they had no trust in CDJR. This year, that number ballooned to 72 percent. Kerrigan didn't cite specific reasons for the loss of trust, but the death of the popular Hemi V8 and Stellantis' administration-level woes probably didn't help. Last year's loser was Ford, which suffered from a no-trust score of 48 percent, but the company's about-face in terms of the EV infrastructure expectations it had of its dealers helped the Blue Oval claw out a 37-percent score this year, keeping it off the unsavory podium behind CDJR, Infiniti, Nissan, and Lincoln.
Perhaps unsurprisingly, dealer groups favor Toyota, Lexus, Subaru, Honda, and Porsche. Around 83 percent of respondents said they had high levels of trust in Toyota, compared to just two percent for CDJR. The survey also asked which brands the dealers would consider adding to their franchises in the next year, and Lexus, Toyota, and Honda took the top three spots. Credit the sterling popularity of crossovers like the Toyota RAV4, Lexus RX, and Honda CR-V.
Dealers responding to the Kerrigan survey expect 2025 to be a year of declining profits or flat growth, with each outcome getting 43 percent of respondents. A slim majority of dealer groups also expect to either sell stores (7 percent) or keep their current retail footprint constant (44 percent), leaving 49 percent of dealers planning on adding one or more stores to their portfolio. The 2025 outlook comes in sharp contrast to the dizzying profits dealers enjoyed in 2021 and 2022, when demand outpaced supply and allowed retailers to charge markups on even the most plebeian cars.
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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