Dealership consolidation likely will continue at a rapid clip this year, as smaller retailers face increasing challenges from large competitors and are tempted by record-high valuations, according to a buy-sell expert.
Buy-sell activity was expected to hit a record last year and "is likely to continue at today's high pace primarily due to buyer demand," Ryan Kerrigan, a managing director of Kerrigan Advisors, an Irvine, Calif., sell-side firm, said during a presentation recorded in December and shown Wednesday during the NADA Show.
"This pandemic highlighted the incredible resilience of the auto retail business model," Kerrigan said. "We also saw the benefits of scale and innovation in our industry to start to supersize profits. And this plays directly into the story of strong buyer demand."