- The EV market isn’t going away, it’s growing, expectations were simply absurd; instead, battery-electric and hybrid-electric vehicles, following tech-adoption trends, are settling into their established place in the U.S. auto industry and may be emerging as the growth driver we all thought it would be
- Save Tesla, the EV manufacturers that sell in the U.S. will rely on a franchise dealer network model
- U.S. auto dealers are seeing solid results year-to-date, but the “easy money” of the Covid years is over and only hands-on dealers will achieve growth
- Dealer mergers-and-acquisitions activity remains near record levels, even as dealer valuations retreat from their Covid peaks
- Amid tremendous pressures on margins, smaller dealers without ready succession plans are looking to sell, while large dealer organizations leverage data and resources to maintain profitability and look for strategic acquisitions
- Fed up with the high price of the average new vehicle, U.S. consumer behaviors will demand the next president – whoever it is – allow less expensive foreign vehicles into the U.S.
NEW YORK, July 30, 2024 (GLOBE NEWSWIRE) -- A new mid-year update of the 2024 Market Outlook Report from the Dave Cantin Group and Kaiser Associates says electric vehicles are here to stay, your local dealer might not be, and the high average cost of new vehicles will force the next U.S. President, whoever it is, to figure out how to pave the way for lower-priced foreign vehicles, and EVs in particular, to enter the market.
“The retail automotive industry has been tremendously profitable the last few years,” said Dave Cantin, CEO of the Dave Cantin Group, a leading M&A advisory firm to automotive retail groups and their owners. “The industry is still doing well, but the easy money is long gone. Dealers are having to adapt to selling battery-electric and hybrid-electric vehicles, rising inventories, persistently high interest rates and new challenges like cybersecurity. On top of that, there is a new breed of large retail automotive competitors that are in a much better position to use their scale to drive margins and find growth. Local mom-and-pop dealers are fighting an uphill battle, and many are ready to sell.”
The Market Outlook Report (MOR) midyear update released today draws on market-backed data and interviews with industry experts. Dave Cantin Group and Kaiser Associates published the first edition of the 2024 MOR, looking at the year ahead, in January. Today’s update provides data and insights on how the year is progressing and what dealers and other industry experts are experiencing and anticipating in the second half of the year. The full report is available here.
The Mid-year MOR highlights the following themes:
- EVs are here to stay: 2024 has seen the beginning of clarity for EVs in the industry. There are emerging winners (e.g., Rivian, VinFast) and losers (Fisker); Tesla is in a better position than it appears, and Toyota remains a leader. Even as the players shake out, it is becoming clearer, as Q2 earnings roll out, that EVs and hybrids aren’t going anywhere. They now have a secure spot in the industry that will continue to grow. Any “disappointments” about sales performance are due to absurd expectations from manufacturers and hype from the media. EV adoption is following the typical new-tech-adoption cycle.
- Dealers are working harder for their money: Many dealerships are seeing growth year-to-date, but they report having to work harder for it. Essentially, the automotive industry is back to the pre-Covid grind. The “easy money” for dealers is over, and strong performance demands hands-on management of every aspect of a dealer’s operations.
- 2024 is the tipping point for small dealer owners: Significant dealer consolidation over the past three years, and more readily available data, has shifted power to larger, more sophisticated dealer groups; 2024 will be the tipping point for small “mom and pop” dealers, many of which will sell rather than struggle to maintain profitability. Small dealers are more vulnerable to the impacts of high interest rates, high vehicle prices, increased inventories, unforeseen disruptions like CDK, and political uncertainty, the report says.
- Consumers demand relief on car prices: The high average price of a new car – at $47,000 – is too high for U.S. consumers. “U.S. car buyers are hitting their spending limit, some of which is due to persistently high interest rates,” Cantin said. “The next administration – regardless of who wins – will face strong pressure from consumers to figure out how to open the door to less expensive foreign vehicles to be sold in the U.S. market, especially EVs.”
- More from MOR: The MOR midyear update also includes statistics and takeaways related to the automotive supply chain, mounting automotive inventories, the effects of the U.S. Supreme Court’s actions on regulation, and interest rates continuing to squeeze consumers and dealers.
View the full Market Outlook Report here: https://www.davecantingroup.com/getMOR
About Dave Cantin Group
Headquartered in New York, NY, The Cave Cantin Group (DCG) is a leading automotive M&A advisory company specializing in acquisitions, divestitures, intelligence, and other advisory services. The company is the M&A services provider of choice for North America’s top automotive dealership groups. Through its M&A intelligence division, DCG produces the automotive podcast, Dealer News Today, and delivers relevant, timely marketing intelligence, including the automotive industry Market Outlook Report (MOR). The company’s nonprofit initiative, DCG Giving, funds child and adolescent cancer research and treatment in communities nationwide as well as other worthy charitable initiatives its clients are passionate about. For more information, please visit davecantingroup.com
About Kaiser Associates, Inc
Headquartered in Washington, DC and London, Kaiser Associates is a growth consulting firm that translates original insights into strategy for ambitious organizations around the world. Kaiser firm combines custom market research with sector expertise to help its clients make more confident, data-backed decisions. For more information, visit www.kaiserassociates.com
Media Contacts
For Dave Cantin Group:
Katie Merx
kmerx@lambert.com
313.510.5090
For Kaiser Associates:
Blaire Hoffman
bhoffman@kaiserassociates.com
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/77cb858b-3157-4ee5-831e-04724ef61411
