Automotive
Down But Still Up
So profits are down but still up, and activity is down disproportionately compared to the dip in profits. Still, large groups and private buyers are --placing bets-- investing wisely in a solid recovery by acquiring stores while the value is down.
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Do you get the Haig Report? You oughta, but in case you don't, you can count on us to pull out the choice bits:
- Pre-tax profits at dealerships owned by publicly traded auto retailers are trending downward, falling by 5% in the year to 3/31/2023 and by 22% in Q1 2023 compared to Q1 2022. Despite this, profits remain over 3x higher than 2019 levels.
- The buy-sell activity saw a 31% decrease in Q1 2023 compared to the same period in 2022. However, it's expected to rebound due to available cash, substantial profits, and larger groups seeking future advantages by acquiring additional dealerships.
- The "blue sky" value of dealerships declined by an estimated 3% from 2022-end to Q1 2023-end, a decrease in line with buyer expectations given the anticipated profit decline. Despite this drop, values remain strong due to ongoing dealership acquisitions by private buyers and public companies.
