Earlier in the year, many potential sellers were hanging onto their stores believing no price could top several years of strong sales. But the attacks could change their minds - particularly if the sellers are close to retirement.
Even before Sept. 11, the slumping economy was affecting dealership prices, particularly small, single-point stores.
Jeff DeBoer, vice president of finance for Lithia Motors Inc. in Medford, Ore., said prices for those types of dealerships have declined 50 percent from their peak in 1998 and 1999.
Unlike other large publicly held dealership groups, Lithia acquires single-point dealerships in secondary markets that can use some improvement.
The higher-volume import stores in metropolitan areas still are expected to command five to six times blue sky, or intangible assets, particularly if they are Toyota, Honda or BMW dealerships, said Sheldon Sandler, managing director of Bel Air Partners, a Princeton, N.J., investment firm specializing in the automotive business. And good domestic dealerships - which have been struggling with slower sales - are likely to get three to four times pretax earnings for blue sky.
The downturn is not expected to generate many fire sales unless it extends well into next year, but it should make it easier for the big chains to get bigger.
In other retail news:
Staff Reporter Donna Harris can be reached at
or 540-668 7295.