As the automotive industry continues to evolve and change and there are a number of trends emerging which impact dealership values, some of our key observations are as follows:
- Auto dealer groups are still enjoying extraordinary earnings, however, the growth in profits have likely levelled off in Q2/Q3 2022.
- Average estimated goodwill values for dealerships have doubled since Q4 2019, with the multiples of net profit before tax (NPBT) remaining constant. The uplift in goodwill values attributed to increased profitability.
- Pent up demand for new cars is driving 2022 volumes with tight supply, which will underpin dealer profits for some time – at least another 12 months – despite the significant economic headwinds that are emerging.
New Car Sales in Australia
Source: VFacts & *Annualised figures
- Consolidation continues to be a dominant trend in retail automotive and will be for some time as the industry is still very fragmented
| Dealer groups by number of rooftops | Number of owners in range | Percentage of Owners | Total rooftops by range | Percentage of rooftops |
| 50+ | 5 | 0.8% | 608 | 18.0% |
| 26-50 | 6 | 0.9% | 222 | 6.6% |
| 11-25 | 49 | 7.4% | 714 | 21.1% |
| 6-10 | 102 | 15.4% | 753 | 22.3% |
| 1-5 | 501 | 75.5% | 1084 | 32.1% |
| Totals | 663 | 100.0% | 3381 | 100% |
Source: Pitcher Partners dealer listing
The following delves deeper into some of the emerging trends across the sector:
Economic and new vehicle supply trends (a bit of history)
Mergers and Acquisitions (M&A) Trends
Current and Future Maintainable Earnings and Deal Structure trends
Current market conditions impacting the Australian retail motor industry
The following articles provide insights in the future of the industry:
This article was first published by Go Auto News on 27 September 2022. Licensed by the Copyright Agency. You must not copy this work without permission.
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