Survey: Chrysler-Dodge-Jeep-Ram unseats Ford as least-trusted among dealers

Chrysler-Dodge-Jeep-Ram is the least-trusted franchise, unseating Ford for the undesirable spot, according to the latest dealership sentiment survey from Kerrigan Advisors.

Seventy-two percent of dealers signaled they had no trust in Chrysler-Dodge-Jeep-Ram, owned by troubled automaker Stellantis, according to the sixth annual Kerrigan Dealer Survey. Just 2 percent of dealers said they had a high level of trust in Chrysler-Dodge-Jeep-Ram and 26 percent said they had moderate trust. A year ago, 39 percent of dealers asked said they had no trust in Chrysler-Dodge-Jeep-Ram.

More than 635 dealers responded anonymously to the survey, conducted from June to November, which also aimed to gather dealer sentiment on “the future value of their business, franchise earnings and valuation expectations.”

Dealers on most- and least-trusted brands

For the second time in its annual dealer survey, Kerrigan Advisors asked dealers what level of trust they have for each brand — high, moderate or none.

This is the second year the franchise trust question appeared on the survey. Ford was the least trusted the prior year, with 48 percent of respondents expressing no trust in the brand. After a year of revised expectations around preparing for and certifying to sell electric vehicles, the percentage of dealers saying they had no trust in Ford improved by 11 percentage points, the most of any franchise. Ford ranks fifth among least-trusted brands.

Erin Kerrigan, managing director for Kerrigan Advisors, a sell-side firm in Incline Village, Nev., told Automotive News that Ford’s about-face on EVs fueled its improvement.

“I think that their reversal on their EV strategy as it related to the retailers was very, very positively received,” Kerrigan said. On the negative side, she said, Chrysler-Dodge-Jeep-Ram “saw a dramatic increase in the percentage of dealers who have no trust in the franchise.”

Toyota remains most trusted brand, dealers say

For a second year, Toyota reigned supreme in trust rankings, with 83 percent of dealers saying they had a high level of trust in the brand. Toyota was followed by Lexus, Subaru, Honda and Porsche.

For the first time, Kerrigan Advisors asked dealers which franchises they are seeking to add in the next 12 months.

The answers tended to run along trust levels, with Toyota topping the nonluxury chart at 45 percent, Honda next at 31 percent and Subaru with 27 percent. On the luxury side, dealers said they were most interested to add Lexus dealerships at 17 percent, Mercedes stores at 14 percent and BMW at 13 percent.

Responses to expected changes in dealership franchise valuations also tended to track with dealer trust levels. For instance, Lexus with 44 percent and Toyota with 43 percent — among the most trusted franchises according to the survey — also were selected as the top two franchises to increase in value. Honda came in third.

Conversely, the least-trusted brands, including Chrysler-Dodge-Jeep-Ram, Nissan and Lincoln, each had 64 percent or more of responding dealers expecting those franchises to decline in value in the next 12 months.

Factors such as swelling days’ supply and stability in management affect dealer sentiments, Kerrigan said. Improving those will increase trust. “I think it can change in 12 months, quite easily,” she said. “Dealers are very focused on one thing, and that is running a profitable, growing operation.”

Dealers experience new ‘normal’ era

Fifty-one percent of dealers asked expect store valuations to remain the same in the next 12 months, 32 percent expect dealership valuations to decrease and 17 percent think valuations will increase in 2025.

A rising number of dealers predict lower profits. Forty-three percent project declining profits in 2025 — up from 38 percent a year ago and the highest in four years. Forty-three percent also expect profits to stay flat, while 14 percent see higher profits — just 1 percentage point lower than the year before, but down from 79 percent in 2021.

“Kerrigan Advisors believes the divergent perspectives regarding future dealership profitability are a reflection of the earnings volatility of certain franchises, particularly for those whose days’ supply ballooned in 2024 resulting in dramatic swings in franchise profits when compared to the pandemic years,” the sell-side firm said.

Kerrigan said dealer consensus reflects entry into a new normalization period following the roller coaster years of the pandemic.

“We’ve come pretty far from where we were in the pandemic years, where the expectations were pretty extreme,” Kerrigan said.

More dealers may opt to sell stores

EV and manufacturer facility requirements topped dealer concerns for which business segments will impact profitability the most: Sixty-eight percent of dealers said new EVs would have a negative impact, while 48 percent said real estate and property investment costs, including for EVs, would negatively impact profits. These views appear to be influencing some dealers’ decisions to sell their stores, according to Kerrigan Advisors.

Dealers’ answers to a query about future business moves could signal another industry benchmark where “consolidation is the name of the game,” Kerrigan said. Forty-nine percent expect to add one or more stores in the next 12 months, while 7 percent said they planned to sell one or more, which is up 5 percentage points from 2022. And 44 percent said they don’t plan to buy or sell stores.

A “steady state is going to be harder to achieve,” Kerrigan said. “Meaning you’re going to either need to grow your business or probably consider an exit, and the period of just owning one or two dealerships is probably, to some degree, starting to come to an end, especially in major metros.”