Publicly owned dealership groups are buying stores and eying more acquisitions, though several are wary about high prices, with a few turning down deals because they say the sellers were asking too much.
Dealership profits during the coronavirus pandemic shot to record levels in 2020, and high profits have continued this year despite new-vehicle inventory shortages. While a boon for dealers, pandemic-fueled profits have created challenges in pricing stores for sale. Some sellers want to use the most recent profits as a basis for dealership pricing — but that's a threshold many buyers, including several of the publics, are avoiding.
Asbury Automotive Group CEO David Hult said pricing is why his group in the past six months walked away from acquisitions of dealerships that could have generated $3 billion to $4 billion in annual revenues.
"We just didn't feel like it was priced appropriately," Hult told analysts in July.