China's auto retailers and Chinese investors are show-ing increasing interest in acquiring U.S. dealerships, although they have not completed a deal yet, according to several buy-sell experts.
On Nov. 29, more than a dozen Chinese dealers will be in Los Angeles for a symposium to learn more about how to enter the U.S. market, according to Ken Rosenfield, a CPA working with the group.
Making inquiries
How likely are Chinese-owned auto dealerships in the U.S.? Potential investors are now kicking the tires.Rosenfield, founder and managing partner of Rosenfield & Co. in Orlando and New York, said he has been working with the group for about a year and a half. The visiting dealers are from across China, and their interests include taking a minority stake in a U.S. operation, partnering with current U.S. dealers,orbuying their own U.S. dealerships. The Chinese want to learn more about how U.S. dealerships operate, including financing and technology, Rosenfield told Automotive News.
"They're very interested in the used-vehicle market," he added.
The Chinese dealers and investors also may be interested in partnering with a U.S. dealer in operating a dealership in China, he said.
Erin Kerrigan, founder and managing director of Kerrigan Advisors in Irvine, Calif., said her sell-side and consulting firm has had several discussions over the past 12 months with Chinese auto retailers who are interested in entering the U.S. market. She declined to provide specifics.
"We're seeing Chinese business- people looking to get their capital, in many cases, out of China," Kerrigan told Automotive News. "And investing in new markets is one way to do that."
James Taylor, managing director of the boutique San Francisco advisory firm Presidio Group, said he also has had serious conversations with six or so Chinese investors or firms in the past two years.
"Either they are extremely large scale, seeking to build very large enterprises, or they are what we would call dipping their toe in the water" with one to two stores, Taylor said.