Auto Dealer Valuation Insights

September 21, 2022 Blue Sky Mergers, Acquisitions, & Divestitures

Blue Sky Multiples Remain Flat as Earnings Plateau

Dealers Continue to Perform through Negative Economic Indicators

Interest rates are up, gas prices are volatile, inflation is rampant and vehicle affordability, GDP, and the stock market are down. How have auto dealers belied all of these negative headwinds to produce strong earnings? The simple answer is that dealers have been able to pass on price increases to consumers and have benefitted from more lean cost structures in the wake of the pandemic when they had to cut all costs possible to the bone. In this week’s blog, we consider these trends and analyze Blue Sky values and multiples over the past few years thanks to info provided by Haig Partners.

September 12, 2022 SAAR

August 2022 SAAR

The August SAAR was 13.2 million units, down 1.1% from last month but up 0.7% from August 2021. This month’s data release, marks the third month in a row that the SAAR has been in the low 13 million-unit range, with the metric seemingly having stabilized in the short term. To illustrate this trend, over the last four months the average SAAR has been 13.1 million units.

Now that the August data has been released, we have much more visibility to what the full year SAAR might look like.

August 29, 2022 COVID-19 Coverage Special Topics

Rideshare: Friend or Foe to Auto Dealers and Manufacturers?

In this post, we focus on the impact of Uber and Lyft on the auto industry as a whole, particularly as compared to initial concerns. We address the questions: “How has the rise of rideshare giants affected the auto industry?”, “How did the COVID-19 pandemic affect ridesharing?” and “What can we expect from the rideshare industry going forward?”

August 23, 2022 Blue Sky Special Topics Valuation Issues

Powersports: Alternative Growth Opportunity for Auto Dealers

Auto dealers have experienced heightened profitability over the last two years. For dealers with excess cash from continued profits or remaining PPP funds, have you thought about the powersports industry? As one auto dealer client recently recounted to us, “if you have the skills and experience in selling high volumes of automobiles to consumers, then you have the necessary skills to also succeed in the powersports industry.” In this post, we explain what the powersports industry is and how big it is, as well as highlight similarities and differences to the traditional auto dealer industry for those interested in possibly entering this industry.

August 16, 2022 Blue Sky Public Auto Dealers Valuation Issues

Q2 2022 Earnings Calls

Persistent New Vehicle Inventory Shortages Keep Days’ Supply Low and Pre-sales High - Consumers May Be on Shakier Ground, But Demand is Still Strong

Supply issues continue to dominate the industry with no end in sight. This week we discuss supply issues along with three other themes that were discussed during the Q2 earnings calls.

August 9, 2022 SAAR

July 2022 SAAR

CHIPS-Plus Act Passes: What Does That Mean for Auto Dealers?

The July 2022 SAAR was 13.3 million units, an improvement from last month’s 13.0 million units but down 10.2% from July 2021’s rate of 14.7 million units. The SAAR continues to reflect depressed sales rates as supply chain shortages restrict volumes across the United States. This week we briefly discuss the July 2022 SAAR but focus primarily on the passing of the CHIPS-Plus bill and how it might affect auto dealers.

August 4, 2022 SAAR Special Topics Valuation Issues

2022: How Is the Auto Industry Doing and What Does the Future Hold?

Status Quo or Winds of Change?

The first half of 2022 is behind us, and with school about to start, report cards will be here before we know it. In that same light, the auto industry has published its statistics for the first six months. This post reviews predictions by industry analysts (and us) made at the beginning of the year by analyzing several key metrics. Additionally, we discuss threats that arose during the first half of 2022 and their impact on the auto industry for the remainder of the year and perhaps longer. Finally, we offer a few predictions for the second half of 2022.

July 26, 2022 Public Auto Dealers Supply Chain Used Vehicles

Carvana Is Looking More Like Icarus

How the Pandemic Darling May Have Flown Too Close to the Sun

Lately, Carvana has been in the news for all the wrong reasons. Its share price is down over 90% since its pandemic peak and currently sits below the low levels of March 2020. This post provides an abbreviated history of Carvana from its founding in 2012 to 2022 and discusses what its successes and struggles mean for traditional auto dealerships.

July 18, 2022 Special Topics

Meet The Team

David W. R. Harkins, CFA, ABV

In each “Meet the Team” segment, we highlight a different professional on our Auto Dealer Industry team. This week we highlight David Harkins, Senior Financial Analyst. We hope you enjoy getting to know us a bit better.

July 13, 2022 SAAR

June 2022 SAAR

Quantifying Pent-Up Demand

The June SAAR was 13 million units, up 2.3% from last month but down 16% compared to June 2021. This month’s release closes out the second quarter of the year, bringing the total Q2 2022 SAAR to 13.4 million units.