NADA Show 2020: Dave Cantin Group

Stephen Jones, Director of Administration

Stephen Jones, Director of Administration

These are busy times for companies that help match buyers and sellers for car dealerships. Stephen Jones, Director of Administration at the Dave Cantin Group, said there are a number of factors driving the surge in the buy-sell activity.

“There’s been a ton of merchant activity in Canada and the United States. The market’s shifting — there’s all these forces of change, some are saying, ‘I’m tapping out and you know, I don’t feel like my next generation is going to be able to do this, or they want the money, or they don’t want to recapitalize,” said Jones.

Another factor is the uncertainty about the car retail business in general. When you combine that with the aging demographic of owners, it’s natural for many owners to consider their options. “Almost every dealership is a privately held family business. What we’re seeing right now are margins being compressed, and it’s getting harder to operate the business. You’re having to stay alive by doing all your fixed ops. So it’s becoming more challenging to be a car dealer,” said Jones.

For dealer groups, however, they are able to take advantage of scale and spread costs and support services across a number of dealerships. “They’re generally successful at handling this, but if you’re a standalone, it becomes more challenging — especially if you have costs that are prohibitive to operating,” he said. If a competitor has less cost structure, then they can make more money.

For standalone dealers, they can continue to try to operate and compete, but he said if they don’t have a succession plan in place, they could lose everything.

But for every seller, there are lots of buyers. “They just can’t get enough dealerships right now,” said Jones. “They are buying everything.”

Return to NADA Show 2020

Related Articles
Share via
Copy link