Navigating the Evolving Automotive Dealership Buy/Sell Market: Key Takeaways from My Recent Webinar on Buy/Sell Hot Topics 2025

I recently presented a webinar on the current state and future trends of the automotive dealership buy/sell market. A “buy/sell” is a term used to describe the purchase and sale of a dealership, whether that is in the form of an “asset” sale or a “stock/membership” sale. This blog post summarizes the key takeaways from that webinar, offering insights for dealership owners and professionals in the automotive industry. For those who couldn’t attend, you can watch the full webinar on YouTube.

State of the Auto Market

The webinar started with an in-depth review of the current auto market. Here are the major highlights:

• Tariffs: The automotive manufacturing industry spans the borders of the United States, Canada, and Mexico and beyond. Vehicles are assembled using components sourced outside of the United States. If, and when, the Trump Administration will impose tariffs on the automotive industry remains an open question. What effect, if any, tariffs will have on particular makes the buy/sell market is unknown at this time.
• Return to “Normal”: Post-COVID, dealerships experienced unprecedented profitability and were thus an attractive investment commanding high prices for their assets. However, inventory levels are building, and dealers aren’t getting the high gross profits they did in the past. While far from being a “buyers” market, downward adjustments in profitability are giving buyers in some markets opportunities to acquire certain brands they may have been priced out of in the last several years.
• EV Growth: Electric vehicles (EVs) are grabbing higher sales and share, thanks to several new entrants from legacy automotive manufacturers. Franchised dealers have shown that they can sell and service EVs through the existing dealer network, contrary to claims by some that EVs must be sold directly to consumers. 
• Profitability and ROI: Despite market changes, the industry continues to offer a solid return on investment. Adjusting strategies around inventory management and customer service can help maintain healthy profit margins.

Hot Topics for 2025

The webinar also explored several emerging themes that are expected to dominate the industry in the coming years:

• Valuations – A New Normal: Discussions focused on evolving dealership valuations and manufacturer considerations, marking a shift toward a “new normal” in strategic investments and long-term planning.
• Candidate Quality: The importance of attracting and retaining high-caliber talent to acquire dealerships is a focus of many manufacturers, not just top-tier brands in high demand. 
• Facilities and Inventory Management: Both the digital and physical aspects of your business are coming under closer scrutiny by manufacturers. Balancing robust digital and physical facility requirements—and optimizing inventory management—remains crucial.

Driving Continued Market Consolidation

A significant part of the discussion centered on the factors driving market consolidation:

• Large Private Groups and Private Equity: Large private groups and private equity are reshaping the industry landscape, leading to more consolidation and strategic shifts.
• Public Companies: Publicly traded dealer groups continue to have a significant portion of the retail business, with their strategic moves impacting certain markets.  Divestiture of brands by the publics is creating buying opportunities for larger private dealer groups, private equity, and regional dealer groups. 
• Regional Dealer Groups: Emerging regional dealer groups that focus on specific geographic areas are also acquiring more and more dealerships, consolidating their market power over the areas where they do business.

Buy/Sell Contractual Considerations

The webinar also covered several matters that buyers and sellers should consider when drafting buy/sell transactional agreements:

• Intellectual Property and Data Considerations: With data becoming a key asset, understanding who owns what intellectual property is vital for ensuring buyers and sellers are getting the deals they negotiate.
• Facility Requirements and EV Infrastructure: Manufacturer requirements to upgrade both traditional facilities and EV infrastructure must be considered and addressed in any agreements.
• Navigating Franchise Agreement Changes: Many manufacturers are changing their dealer agreements, with some of these changes coming as a shock to existing dealers. Buyers and sellers should be aware of the franchise obligations of the seller and any requirements by the manufacturer to assume a franchise agreement with new terms.
• Environmental Due Diligence: Environmental issues continue to be a key consideration in buy/sells regardless of whether preexisting contamination exists at the dealership property. No one likes surprises, so it is crucial to understand what environmental issues are, or could be, at a property and address issues such as due diligence and remediation in the agreements.

Conclusion

The auto market continues to involve but remains an attractive investment for potential buyers. Understanding trends and addressing key issues in buy/sell agreements can help deals close smoothly. If you have any questions, require further clarification on these trends, or wish to discuss the potential impacts on your business, please feel free to contact me. I’m here to help you stay ahead in this evolving landscape.

PS: Be sure to check out the full webinar on YouTube.