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.
Regular updates on issues important to the Auto Dealer industry
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.
Last week we attended the Annual Tri-State Convention for the Automotive Associations of Tennessee, Mississippi, and Alabama. The event provided a great opportunity to discuss trends in the automotive industry with industry participants and dealers from different manufacturers and geographic areas. In this blog, we discuss some of the trends discussed last week, including a variety of topics that we have covered before in this space. We also incorporate highlights of a presentation from noted industry analyst Glenn Mercer (no affiliation with Mercer Capital) regarding the “Dealership of Tomorrow.”
Auto dealers across the country rely on their Finance and Insurance (F&I) departments for a significant portion of their revenue. While top-line revenue in these departments typically makes up a small portion of a new car dealership’s total revenue mix, they have much better margins than their selling division counterparts. Third-party lenders play a larger role in the financing process for used dealers who do not have their own captive finance operations, and the economics are typically different from their new vehicle-selling counterparts.
We look at the layout and current state of the auto finance industry, as well as quotes from public auto executives about the current financing environment in this blog post.
Scott Womack recently sat down with Tony Karabon of DCG Acquisitions to discuss trends in the auto dealer industry such as transaction volume and multiples along with the implications of an agency model for OEMs. DCG Acquisitions is a national, full-service mergers and acquisitions firm representing buyers and sellers of automobile dealerships.
The May 2022 SAAR was 12.7 million units, down 12.6% from last month and 24.9 % from May 2021. The SAAR for this month fell short of expectations, and the drop in May’s sales pace makes it more likely that the second quarter of 2022 will not improve on the first quarter’s average SAAR of 14.1 million units. The SAAR for May was low due to low inventory across the country.
In this week’s blog post, we compare the stock prices of Ford, Stellantis, and GM to the timing of rate hikes by the Federal Reserve in 2022 in an attempt to answer the question “have higher interest rates hurt auto manufacturer stock prices?”
It’s earnings call season again. Themes from the Q1 2022 earnings calls were affordability issues, managing stores as a portfolio, the health of the franchise dealer model, and who repairs electric vehicle components and what that means for dealerships. All this against a backdrop of the continued inventory shortage makes for an interesting post. Read more here.
Connected cars are an undiscussed subplot in the current inventory crunch as more tech-enabled vehicles require more microchips, which as everyone knows by now are in short supply. In this post, we examine the size and growth of the connected car segment and discuss the struggle between auto manufacturers/OEMs and auto dealers over servicing these features.
The valuation of auto dealerships can be very challenging and complex. This week we discuss a recent Appellate Court decision, released from a case (Thomas A. Buckley v. Grover C. Carlock, Jr. et.al.) that we were directly involved in back in 2019. The case centered around a shareholder oppression issue involving a minority owner of an “ultra-high-line” auto dealership. Mercer Capital was hired by the Defendant to serve as the expert witness.
The April 2022 SAAR was 14.3 million units, up 6.5% from 13.4 million in March but down 21.9% from the recent high April 2021 SAAR of 18.3 million units. We dig into the comparison of the last three April SAAR figures (’20, ’21, and ’22) in this post, as dynamic conditions resulted in three very different narratives surrounding the SAAR.
If you only look at the Blue Sky multiples, you’re missing the bigger picture because valuations (multiples) may be flat, but values are up. In this week’s post, we look at an illustrative example and check in on the valuation multiples for luxury, mid-line, and domestic brands.
