Strong 2020 forecast buoys declining dealer M&A market, Haig Report finds

The M&A market for private auto dealerships declined 36 percent in the third quarter as compared to the third quarter of 2018, according to Haig Partners' latest release of the Haig Report.

The report, which explores trends in vehicle retail and the impact they bring on dealership values, also showed that public company spending on auto acquisitions in the U.S. decreased approximately 28 percent from $625 million in the first nine months of 2018 to $452 million in the same period of 2019. However, the study found that inflation, GDP, employment, fuel prices and consumer sentiment continue to be advantageous for auto dealers.  

"Based on reports from the market and our own practice, we are expecting a good number of transactions to close in the first quarter of 2020," Haig Partners President Alan Haig said in a press release. "There are more dealerships available for sale than in the past, and there are many buyers with access to plenty of capital."

The buy-sell advisory firm’s study is based on data collected from interviews with dealer groups and accountants with expertise in auto retail, and other various public sources.

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