Despite Cost, Auto Dealers in Acquisition Mode
Dealer Joe Serra hasn’t seen dealership price tags this high before. But it doesn’t scare him away from seeking acquisitions for his 34-store group.
After all, dealership profits are at record highs, too, and Serra’s aim is growth.
“I’m not sitting on the sidelines waiting for it to change,” Serra, president of Serra Automotive Inc. in Grand Blanc, Mich., said of store pricing. “I’m just out there playing.”
Automotive News reported that Serra, other buyers and dealership advisers agree that it’s a seller’s market. Dealership values are at record highs when measured on a pure dollar basis, they say. Still, acquisition activity is robust as the market continues to attract buyers with long-term views. The earlier they can buy before the next downturn, the sooner they’ll earn profits and pay down acquisition costs.
“I see buyers moving faster than they did three years ago,” said Alan Haig, president of Haig Partners, a dealership buy/sell advisory firm in Fort Lauderdale, Fla. “There’s more confidence on the part of the buyers and more willingness to write a big check to get the dealership they want.”
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