Dealership M&A: Opportunities for Consolidation
Starting in 2022 and continuing through most of 2024, the American auto dealership industry has experienced a major boom in the mergers and acquisition market, leading to a mass consolidation of dealerships.
According to research from Automotive News, the top 10 dealership groups now control about 9.3% of the dealerships in the U.S., which would be a record high. Additionally, the top 150 dealership groups accounted for nearly a quarter (24.1%) of all retail sales in 2023.
While dealership sales have started to cool off as these newly consolidated auto groups make sure their rooftops are all fully performance-optimized amidst some economic uncertainty for the auto industry, there will certainly be more consolidation on the horizon. According to research from the National Automobile Dealers Association, 91% of dealers still own up to five dealerships, which appears to be a very attractive size for buyers.
