Look for deep-pocketed buyers to snatch up more dealership groups over the next 12 months and for foreign investors and outsiders to scope out the U.S. auto retailer landscape.
Those are two trends buy-sell experts noted in quarterly reports released last week.
In the first nine months, there were 172 transactions compared with 184 in the year-earlier period, Erin Kerrigan, managing director of buy-sell advisory firm Kerrigan Advisors in Irvine, Calif., wrote in her company's third-quarter Blue Sky Report, citing data from The Banks Report.
The publicly held auto retailers reduced their acquisition spending by 18 percent to $572 million in the first nine months, opting to shift money instead to stock buybacks, Kerrigan said. Private dealerships acquired 274 franchises compared with the publics' 52 in the first nine months, her report said.
Meanwhile, the number of transactions for dealership groups, as opposed to single-store purchases, continued to rise. There were 49 multidealership deals completed in the first nine months vs. 37 a year earlier, Kerrigan said.
Kerrigan said this trend will continue through 2017 because it's largely seller-driven.