Auto Dealership Profits Remain High Despite Political, Economic Pressure

Haig Partners LLC released its Q1 2025 Haig Report®, the longest-published quarterly report in auto retail tracking industry trends and their impact on dealership values. Q1 2025 brought ongoing strength for many auto dealerships, with profits falling only 1% year-over-year. At current levels, the average auto dealership is making about twice the amount of profit than before the pandemic.

The Q1 2025 release marks the 11^th anniversary of The Haig Report®. For the past 44 quarters, the team at Haig Partners has provided reliable and insightful updates on trends within auto retail and their resulting impact on dealership values. The Haig Report® has gained a significant following since its inception in 2014, and its goal remains the same: to help buyers and sellers of dealerships make better, more informed decisions to help them Maximize the Value of Their Lives’ Work™.

Slowest Q1 for dealership buy-sells since 2015.

The first quarter of 2025 was the slowest Q1 for auto dealership buy-sell activity since 2015, if not earlier. Private dealers remained the most acquisitive, acquiring 64 dealerships, while public companies acquired only four dealerships. Acquisitions by public companies are picking up in Q2, however, as we know about the pending closing of a couple of landmark acquisitions such as Asbury’s purchase of the Herb Chambers Companies (33 dealerships) and Group 1’s acquisitions of Mercedes-Benz of Austin and Scanlon Lexus.

Dealership profits remained high in Q1.

The average publicly owned auto dealership generated $1.0M in pre-tax income in Q1 2025, only a 4% decline from Q1 2024. Over the last 12 months, the average publicly owned dealership made $3.9M in pre-tax income, only a 1% decline from 2024. This solidification of profits is a promising sign, although tariffs could reduce profits later in 2025.

Blue sky values nearly unchanged from 2024.

Haig Partners reports that the estimated average blue sky value of a publicly owned dealership was $20.7M in Q1 2025, a decline of 1% from year-end 2024 and a decline of 15% from 2023. At this level, blue sky values for dealerships remain about twice as high as they were before the pandemic, thanks to higher earnings and strong demand from dealership buyers.

Buy-sell activity expected to increase later in 2025 but will likely be less than in 2024.

Despite a slow start, the Q1 Haig Report® predicts an increase in buy-sell activity throughout the remainder of the year. There are several acquisitions led by public companies that are expected to close in Q2. Private buyers are also active. The transaction pipeline for Haig Partners is similar to the level of activity we saw in 2024 when we advised our clients on the sale of 58 dealerships. Through May of 2025, Haig Partners had been the exclusive advisor on the sale of 18 dealerships, with 36 more pending closing and 16 rooftops still in-market. We see tariffs having a dampening effect on the market, with transactions moving more slowly in the past, and some sellers waiting to enter the market until there is more clarity.

Key takeaways from the Q1 2025 Haig Report® include:

• The average publicly owned dealership made an estimated $3.9M in the 12-month period ended Q1 2025, only a 1% drop from 2024.
• Q1 2025 was the least active 1^st quarter for dealership M&A in a decade, if not longer. Only 68 dealerships are believed to have been bought or sold in Q1 2025.
• Public company acquisition spending on domestic auto dealership acquisitions decreased over 91% in Q1. Public M&A activity is expected to rise significantly in coming quarters.
• Average estimated blue sky values remained at elevated levels in Q1 2025 LTM, down just 15% from the market peak in 2023.

Alan Haig, President of Haig Partners, shared, “The auto retail industry is in a confusing place. On the one hand, auto sales are up and profits are strong. On the other hand, newly imposed tariffs have spooked many OEMs and consumer confidence has plunged to near record lows. There is some general faith that “things will work out – this is just the way Trump negotiates,” but it seems likely there will be some lingering tariffs that will cause pain to many for some time.

"At the moment, auto dealers are feeling pretty confident. They have seen the auto retail business model endure all kinds of shocks and emerge highly profitable. Our friends tell us that they believe there will be a period of a few months to a year when the tariffs bite and profits may suffer. And then they believe there will be an extended period of economic growth that will lift consumer confidence, sales will bounce back above 17 million units, and dealership profits will start growing again.

"In terms of the buy-sell market, things are also a little confused. We have never seen more demand for dealerships as almost every day we are contacted by an existing or want-to-be dealer expressing their interest in buying dealerships. But so far in 2025 the number of dealerships sold has plunged by 64% from Q1 2024. Perhaps buyers and sellers were on the sidelines during the presidential election that went on in the 4^th quarter of last year.

"As for our own practice, in 2024 we advised on the sale of 58 dealerships. Several of these dealerships sold for record high prices for their franchises as earnings remained very high. But we also began to see some dealerships falling into loss positions, leading to their owners choosing to sell them for just a few million dollars in blue sky.

"As we turn to 2025, our pipeline of dealerships has never been stronger. We have closed on the sale of 18 dealerships, have another 36 dealerships pending closing, and are in market with another 16 dealerships. Only one of these transactions has been impacted by tariffs, with a buyer for an Audi dealership asking for a pause until they can assess the impact on that brand. And the pricing for almost every transaction has been strong. We have seen no diminution of dealership values so far from tariffs. In our Q4 2024 report we made eight changes to blue sky multiples to reflect changing pricing for dealerships. In this report, we make none.

"We believe that one reason auto dealers are calm is because they are making investments based upon a very long timeline, 20 years or more. They are less concerned about short-term economic issues, and more concerned with choosing the right franchises, retaining the best talent, and treating their customers well. If they perform in the areas that they can control, dealers are confident the next few decades in auto retail will be as successful as the past few.”

Q1 2025 Haig Report® Highlights

• General Motors has entered a product renaissance. GM posted a 17% sales gain in Q1, including double-digit growth across all its brands.
  • Chevrolet: 14% Q1 gain. Fastest-growing EV brand in the U.S. Leads small SUV segment with the Trax (57% Q1 gain), rapid EV market share growth via Blazer and Equinox EVs. Incredible variety of models, trims and price points, starting at $20K.
  • Buick: 39% Q1 gain. Nine consecutive quarters of year-over-year growth. Due to many dealers taking buyouts, average Buick dealership profits have risen significantly over the past two to three years.
  • GMC: 18% Q1 gain, and best Q1 in brand history. GMC achieved its highest ever market share in Q1 2025. New Acadia sees sales jump 73%. Best ever quarter for EV sales.
  • Cadillac: 21% Q1 gain. Best first quarter performance since 2008. Industry leading large SUV with the Escalade, including a new electric version. Lyriq EV has been a surprising success. Cadillac’s “V” performance brand chasing the likes of Mercedes’ AMG, BMW’s M divisions.
• Most brands experienced sales gains in Q1. 17 of the 23 brands tracked by Haig Partners saw sales increase in Q1 2025 over Q1 2024.
  • Porsche led sales gains in Q1 (+40.6%), followed by JLR (25.9%) and Buick/GMC (+23.3%). Demand for luxury vehicles increased in early 2025 as consumers attempted to purchase vehicles ahead of potential tariff impacts.
  • GM dominated Q1 sales growth, recording double-digit gains across each brand
  • Q1 sales declines were led by Stellantis (-11.9%), Mercedes-Benz (-9.2%) and Infiniti (-5.3%)
• Inventory levels improve as sales accelerate. The accelerated demand experienced in Q1 helped bring dealer inventory down to a healthier level. In early April, the industry had an average of 70 days’ supply, down 21 days from the beginning of March.
  • Lowest days’ supply in Q1: Lexus (30 days), Toyota (32 days) and Honda (46 days). These brands typically have the lowest inventory levels in the industry.
  • Highest days’ supply in Q1: Jaguar (140+ days), Lincoln (127 days) and Dodge (111 days). Stellantis brands often have the highest inventory levels
• Uncertainty obscures buy-sell outlook for 2025. With mixed macroeconomic and industry data, as well as many outstanding questions on how tariff impacts will materialize, it is very hard to know where industry sales and dealership profits will trend later in 2025.

As we enter our 11th year, our team at Haig Partners thanks you for following our report. We write this report for the benefit of dealers who are interested in buying or selling dealerships. Many of you have contributed your thoughts or data for the benefit of fellow readers, and for this we are grateful. Please contact any of us to discuss today’s market and how we might be able to help you Maximize the Value of Your Life’s Work™.

About The Haig Report®

The Haig Report®, the longest-published quarterly report tracking trends in auto retail and their impact on dealership values, includes data and analysis on the performance of auto dealerships, discusses noteworthy events impacting the automotive retail industry, identifies trends in the M&A market for dealerships, provides guidance on estimated value ranges for different franchises and shares an outlook for the automotive retail buy-sell market. The Haig Report® is based on data gathered from reputable public sources and interviews with leading dealer groups and dealers, bankers, lawyers and accountants who specialize in auto retail.

About Haig Partners

Haig Partners is a leading buy-sell advisory firm that helps owners of higher-value auto, truck, RV, and motorsports dealerships maximize the value of their businesses when they are ready to sell. The team at Haig Partners has advised on the purchase or sale of more than 510 dealerships with a total value of over $10 billion. It has represented 30 dealership groups that qualify for the Top 150 Dealership Groups list published by Automotive News, more than any other firm. Clients of Haig Partners benefit from the group's collective experience as previous executives with leading companies such as Ally Financial, AutoNation, Bank of America, Credit Suisse, Deloitte, FORVIS, J.P. Morgan, the Sewell Automotive Companies and Toyota Financial Services. Leveraging its unmatched expertise and extensive relationships, Haig Partners guides clients to successful outcomes through a confidential and customized sales process. The firm authors The Haig Report®, the leading industry quarterly report that tracks trends in auto retail and their impact on dealership values, and co-authors NADA’s Guide, “Buying and Selling a Dealership.” Haig Partners team members are frequent speakers at industry conferences and are regularly quoted in reputable media outlets, including Reuters, Forbes, The Wall Street Journal, The New York Times, CNBC, BBC, Automotive News, Wards, CarDealershipGuy and CBT News. For more information, visit www.haigpartners.com.

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