Top Dealership Groups 2023: An Overview

The 2023 landscape reveals significant industry consolidation, with Lithia Motors ascending to the number one position, showcasing robust growth and strategic acquisitions.

Market dynamics were notably impacted by a surge in new vehicle retail sales, influencing rankings and valuations, particularly for groups like Morgan Auto Group.

Key trends include increasing blue sky multiples for brands like Kia, while Honda and CDJR experienced decreases, reflecting shifting market preferences and financial performance.

Industry Growth & Market Dynamics in 2023

2023 witnessed a remarkably robust start for the auto dealership buy/sell market, exceeding all previous first-quarter records. This growth was fueled by increased new vehicle retail sales across many dealership groups, directly impacting their rankings and overall financial performance. The industry experienced considerable consolidation, with larger groups actively pursuing acquisitions to expand their market share and footprint.

Morgan Auto Group’s impressive 35% jump in new-vehicle retail sales in 2018, resulting in an 11-place climb to No. 24, exemplifies this dynamic. Furthermore, the valuation landscape shifted, as evidenced by the increased blue sky multiple for Kia, surpassing Hyundai, while Honda and CDJR multiples decreased. This indicates evolving consumer preferences and brand-specific market conditions. The lack of readily available audited financials for many top groups remains an industry anomaly, complicating precise valuation assessments.

The Significance of the Top 150 Dealership Groups List

The annual Automotive News list of the Top 150 U.S. Dealership Groups serves as a crucial benchmark for industry performance and trends. It provides a comprehensive overview of the largest and most successful dealership organizations, highlighting their sales volume, market position, and growth strategies. This ranking is particularly valuable for potential buyers, sellers, and investors seeking to understand the competitive landscape.

Analyzing the list reveals the impact of industry consolidation, exemplified by Lithia Motors’ rise to the top. Groups like Car Pros Automotive Group consistently ranking within the Top 50, demonstrate sustained success. The list also showcases regional strengths, with groups like Jeff Wyler Automotive and Germain Motor Co. representing key markets. It’s a vital resource for assessing dealership group size and unit sales, offering insights into overall market health.

Key Players in 2023

Leading the charge are Lithia Motors, Morgan Auto Group, and Car Pros Automotive Group, demonstrating substantial sales growth and strategic acquisitions throughout the year.

Lithia Motors: Ascending to the Top

Lithia Motors’ remarkable rise to the top spot in 2023 signifies a period of aggressive expansion and strategic acquisitions, fundamentally reshaping the dealership landscape;

The company’s success isn’t merely about volume; it’s a testament to a focused approach on market consolidation and capitalizing on emerging opportunities within the automotive retail sector.

This ascent from a long-time runner-up demonstrates a clear shift in industry power dynamics, with Lithia effectively leveraging its resources and network to outperform competitors.

Their performance highlights the increasing importance of scale and operational efficiency in a rapidly evolving market, driven by changing consumer preferences and technological advancements.

Lithia’s strategic moves have set a new benchmark for growth and innovation, influencing the strategies of other major players in the industry and solidifying its position as a dominant force.

Morgan Auto Group: Notable Sales Increase

Morgan Auto Group experienced a substantial surge in performance, climbing 11 places to reach the No. 24 position on the Top 150 list, fueled by an impressive 35% jump in new-vehicle retail sales in 2018.

This remarkable increase represents the highest percentage gain among all retailers featured on the list, showcasing the effectiveness of their business strategies and market responsiveness.

A key driver of this success was a deliberate expansion strategy, with Morgan adding eight dealerships to its portfolio during the same period, demonstrating a commitment to growth.

The acquisitions were strategically timed to capitalize on a particularly profitable year, allowing the group to maximize returns and strengthen its market presence.

Morgan Auto Group’s performance underscores the value of proactive expansion and adaptability in a competitive automotive retail environment, setting a positive example for industry peers.

Car Pros Automotive Group: Consistent Top 50 Ranking

Car Pros Automotive Group has solidified its position as a leading automotive retailer, consistently ranking within the Top 50 of the Automotive News list of Top 150 Dealer Groups, achieving this feat for the second consecutive year in 2023.

In 2023, the group reported a total of 20,349 new retail units sold, demonstrating a strong sales volume and sustained customer demand for their vehicles and services.

Notably, Car Pros stands out as the only dealership within the Top 50 that operates with a single-digit number of dealerships, highlighting its efficiency and market penetration.

This achievement underscores the group’s ability to compete effectively against larger, more diversified organizations, showcasing a focused and successful business model.

Car Pros’ consistent performance reflects a commitment to customer satisfaction, operational excellence, and strategic market positioning within the automotive retail landscape.

Jeff Wyler Automotive: Strong Performance in Cincinnati

Jeff Wyler Automotive demonstrates significant strength within the Cincinnati automotive market, consistently securing a prominent ranking among the nation’s top dealership groups. The company achieved a noteworthy 27th position on a recent top dealers list, showcasing its regional dominance.

Alongside Jeff Wyler, other Ohio-based automotive groups also earned recognition, including Performance Automotive Network (41st) and the Kenwood Dealer Group (90th), further highlighting the region’s competitive automotive retail environment.

This strong showing indicates a robust business model, effective market strategies, and a dedicated customer base within the Cincinnati metropolitan area and beyond.

Jeff Wyler’s success contributes to the overall growth and vitality of the automotive industry in Ohio, solidifying its position as a key player in the region.

The group’s consistent performance reflects a commitment to quality, service, and customer satisfaction;

Germain Motor Co.: Ohio Representation

Germain Motor Co. proudly represents Ohio’s automotive retail sector on the national stage, consistently appearing among the Top 150 Dealership Groups. Based in the Columbus area, Germain contributes significantly to the state’s economic landscape and automotive market share.

The company’s inclusion in industry rankings alongside other prominent Ohio groups – such as Jeff Wyler Automotive, Performance Automotive Network, and Kenwood Dealer Group – underscores the state’s thriving automotive business community.

Germain’s success is built upon a foundation of customer service, diverse brand offerings, and strategic market positioning within the competitive Ohio market.

Their continued presence on top dealership lists demonstrates a commitment to growth, innovation, and maintaining a strong regional footprint.

Germain Motor Co. exemplifies Ohio’s automotive industry strength.

Financial Performance & Valuation

Dealership valuations saw Kia’s multiple increase, surpassing Hyundai, while Honda and CDJR multiples decreased in 2023, impacting overall rankings and acquisitions.

Blue Sky Multiples: Kia and Hyundai Valuation Trends

Blue sky multiples, a key metric in dealership valuation, experienced notable shifts throughout 2023, particularly concerning Kia and Hyundai. Kerrigan Advisors reported an increase in the blue sky multiple for Kia, elevating its valuation slightly above its sister brand, Hyundai – a significant development reflecting growing market confidence.

This trend suggests increased investor interest in Kia dealerships, potentially driven by strong sales performance and brand perception. Conversely, Hyundai’s multiple remained comparatively stable or experienced a slight decrease, indicating a more cautious outlook. These fluctuations are crucial for understanding dealership buy/sell market dynamics.

The divergence in multiples highlights the importance of brand-specific performance and market sentiment in determining dealership value, influencing acquisition strategies and overall industry consolidation trends. Monitoring these multiples provides valuable insights into the financial health and future prospects of different automotive brands.

Impact of Acquisitions on Dealership Rankings

Strategic acquisitions played a pivotal role in reshaping the 2023 dealership group rankings. Morgan Auto Group’s impressive climb – moving up 11 places to No. 24 – was directly attributed to adding eight dealerships in 2018, demonstrating the power of expansion. This highlights how aggressive acquisition strategies can rapidly elevate a group’s position.

Lithia Motors’ ascent to the top spot also reflects a pattern of consistent acquisitions, solidifying its market dominance. These deals not only increase unit sales but also expand geographic reach and brand portfolio. The industry is witnessing clear effects of consolidation, with larger groups leveraging acquisitions to gain market share.

Analyzing these shifts reveals that successful groups aren’t solely reliant on organic growth; proactive acquisition strategies are essential for maintaining competitiveness and climbing the rankings.

The Anomaly of Limited Audited Financials

A striking characteristic of the automotive retail landscape is the notable lack of audited financials, even among the Top 150 Dealership Groups. This presents an industry anomaly, creating challenges for accurate valuation and comparative analysis. While robust sales data is available, the absence of verified financial statements introduces a degree of uncertainty.

This lack of transparency impacts blue sky evaluations and complicates the assessment of true financial health. Kerrigan Advisors’ tracking of blue sky multiples relies heavily on reported figures, potentially influenced by varying accounting practices. The situation necessitates careful due diligence during buy/sell transactions.

Addressing this issue would enhance market efficiency and foster greater investor confidence within the automotive retail sector.

Trends & Observations

Industry consolidation is accelerating, evidenced by Lithia Motors’ rise, while new vehicle retail sales significantly influence dealership group rankings and overall market valuation.

Industry Consolidation & Its Effects

The automotive retail sector is experiencing a period of intense consolidation, dramatically reshaping the competitive landscape. This trend is clearly visible in the 2023 rankings, most notably with Lithia Motors securing the top spot, a direct result of strategic acquisitions and organic growth.

Increased consolidation leads to larger dealership groups wielding greater bargaining power with manufacturers, potentially impacting pricing and inventory allocation. Smaller, independent dealerships face increasing pressure to either join larger groups or specialize to maintain profitability.

Acquisitions, like those undertaken by Morgan Auto Group, are becoming a primary driver of growth, allowing groups to expand their geographic reach and brand portfolio. This also creates economies of scale, improving operational efficiency and profitability. However, the lack of consistently audited financials across these groups presents a challenge for accurate valuation and comparison.

New Vehicle Retail Sales as a Ranking Factor

New vehicle retail sales emerged as a critical determinant in the 2023 Top 150 Dealership Groups rankings, directly influencing positions and overall success. Groups demonstrating substantial sales volume consistently ranked higher, highlighting the importance of market share in a competitive environment.

Car Pros Automotive Group, for example, secured a Top 50 ranking, achieving this through selling 20,349 new retail units in 2023. Morgan Auto Group’s impressive 35% increase in new vehicle retail sales in 2018 propelled them up the list by 11 places.

This emphasis on unit sales reflects a broader industry trend where volume is increasingly valued, alongside profitability. Dealerships adept at managing inventory, marketing effectively, and providing a positive customer experience are best positioned to capitalize on this factor and improve their ranking.

Dealership Group Size & Unit Sales

Dealership group size and corresponding unit sales demonstrated a strong correlation within the 2023 Top 150 rankings. Larger groups, possessing greater market reach and brand representation, generally reported higher overall sales volumes, solidifying their positions.

Car Pros Automotive Group’s achievement of ranking 48th, with over 20,000 new retail units sold, exemplifies this trend. However, the data also reveals nuance; Car Pros stands out as the only dealership within the Top 50 operating with a single-digit number of locations.

This suggests that efficient operations and strong sales performance can outweigh sheer size, though scale often provides a significant advantage in a consolidating market. The interplay between group size and unit sales remains a key indicator of success.

Looking Ahead

Future growth hinges on navigating market conditions and potential further consolidation, as evidenced by Lithia Motors’ dominance and ongoing acquisition activity in 2023.

Future Growth Prospects for Top Groups

Looking forward, the top dealership groups are poised for continued, albeit potentially moderated, growth. Lithia Motors, now firmly in the leading position, will likely focus on integrating recent acquisitions and optimizing operational efficiencies to sustain its momentum. Groups like Morgan Auto Group and Car Pros Automotive Group, demonstrating strong sales increases and consistent performance respectively, are expected to pursue strategic expansions.

However, future growth isn’t guaranteed. Market conditions, including fluctuating interest rates and potential economic slowdowns, will significantly impact retail sales. The ability to adapt to evolving consumer preferences – particularly regarding electric vehicles – will also be crucial. Further consolidation within the industry remains a strong possibility, potentially creating even larger, more dominant players. Successfully navigating these challenges will determine which groups thrive in the coming years.

Potential for Further Consolidation

The automotive retail landscape is currently experiencing a wave of consolidation, and this trend is expected to continue. The success of groups like Lithia Motors, achieved through aggressive acquisitions, demonstrates the benefits of scale and market dominance. Smaller, independent dealerships may find it increasingly difficult to compete with the resources and negotiating power of larger groups.

This consolidation is driven by factors such as the rising costs of technology, inventory management, and regulatory compliance. Larger groups can more effectively absorb these expenses. Expect to see continued activity in the buy/sell market, with well-capitalized groups actively seeking to expand their footprints. The anomaly of limited audited financials may also facilitate quicker, less scrutinized acquisitions, further accelerating the consolidation process.

Impact of Market Conditions on Dealership Performance

Dealership performance in 2023 was significantly influenced by fluctuating market conditions, notably the robust growth observed in the first quarter. Increased blue sky multiples, particularly for Kia – surpassing Hyundai – reflect shifting consumer demand and brand valuation. However, decreases in multiples for Honda and CDJR indicate sensitivity to broader economic factors.

New vehicle retail sales proved a crucial ranking factor, as evidenced by Morgan Auto Group’s substantial increase and subsequent rise in the Top 150 list. Groups like Car Pros Automotive maintained strong positions through consistent unit sales. Future performance will depend on navigating potential economic headwinds and adapting to evolving consumer preferences, impacting profitability and overall market share.