Do you have a client considering selling their dealership – or acquiring rooftops to add to their portfolio? Do you know your clients’ five-year strategic plan – or even next year’s plan for revenue generation? If your answer is ‘I don’t know,’ then you are leaving a tremendous amount of money and value on the table.
At EFG, our award-winning client business model is based on being a strategic partner and having a seat at the table for these critical discussions. Proactively engaging with your client is the best way to deliver much-needed value in 2024.
Dealer principals are driven by income development and market differentiation that supports their wealth management goals. Fortunately, the buy/sell market for the retail automotive space has been hot for the last few years. The Q3 Haig Report indicates that demand for acquisitions has remained strong and will continue into 2024. This year has seen some of the most significant retail automotive acquisitions to date, even as the car industry grapples with ongoing economic headwinds.
Whether your client is interested in expanding to a new location with a multi-rooftop acquisition, accepting a buyout offer from a larger auto group, or simply expanding their market demographic by purchasing a specific dealership across town, there are many factors to consider. Agents often find themselves on the cutting room floor when undergoing significant changes like this. However, a seasoned agent can provide helpful guidance not found anywhere else – but only if engaged in the discussion.
Guidance on wealth management and succession planning
After the pandemic, merger and acquisition activity accelerated in the automotive space as larger auto groups bought out smaller groups and rooftops. While values started declining in 2023, consolidation is expected to continue into 2024. When considering purchasing or selling to another group or even passing a dealership on to another generation, there are several factors to consider, including:
- Current equity stakeholders
- How a merger/buyout or succession plan will impact upper management
- Reinsurance positions and long-term profitability goals
- Employee churn, morale, and opportunities for advancement
- Vendor/business partner management
In the simplest scenario, if you’ve developed a strong relationship with the current owner but have no relationship with their successor, how likely are they to keep you on as a strategic advisor?
As consolidation continues in 2024, the agents who keep their clients and possibly expand with them will have a seat at the consolidation table. The only way to secure that seat is by consistently delivering value and strategic guidance to your dealer partners throughout their decision-making process.
EFG Companies brings years of experience and proven results in helping agents grow their business. In fact, we have won numerous Stevies® Awards and have documented case studies on results that directly impact the bottom line. We’re more than an F&I provider; we’re a business partner in the retail automotive industry. Contact us today to learn more about how our team can help you achieve your winning strategy.