Tom McCollum’s Post

There are approximately 18,000 franchised automotive dealerships operating in the US today. Despite recent claims from some auto industry executives suggesting that this time-honored dealership franchise model may be outdated and more expensive than the direct-to-consumer (DTC) approach used by brands like Tesla, Lucid, and Rivian, our research portrays a different story. Our analysis, commissioned by the National Automobile Dealers Association (NADA), reveals that the modern dealer franchise model remains more cost-effective than the DTC route and the agency model being explored by some legacy brands outside the US. Read more > https://owy.mn/3ZSxSEF #AutoIndustry #Dealerships #NADA

Digital Dealer delivers key points derived from Urban Science's latest Franchise Activity Report (FAR): 1.) #dealership numbers are increasing, while #automotive #franchise numbers are decreasing. 2.) A significant rise in new-vehicle sales drove the industry's throughput to a record high since the pandemic and chip shortage began. Amidst these changes, the #autmotiveindustry faces the challenge of adapting to a rapidly transforming market, emphasizing the need for data-driven strategies to navigate the evolving landscape of #electricvehicle and internal combustion engine vehicles. #dealershipgrowth #dealershiptrends #markettrends #automotivesales #marketinsights #datadriven https://lnkd.in/gmVws9FJ

Have you ever wondered what your dealership(s) might be worth in today’s market? Here's a story that might inspire you to take the next step. Shawn and David Ball, owners of Advantage Toyota and Ball Toyota, built their dealerships into two of the highest-performing Toyota stores in West Virginia. Their hard work and vision paid off when they recently sold to Victory Automotive Group, one of the nation’s top dealership groups. This deal was more than just a transaction—it was the culmination of years of dedication and a testament to the American Dream in auto retail. When Shawn and David decided to sell, they trusted Haig Partners to maximize the value of their dealerships. Our expertise in the Toyota dealer community ensured their legacy would continue with the right buyer. Here’s why this matters to you: ->Toyota dealerships remain one of the most sought-after brands in the country. -> Blue sky values for Toyota stores are holding strong, with buyers eager to acquire these high-performing franchises. -> We’ve advised on the sale of 39 Toyota dealerships nationwide—helping dealers achieve exceptional outcomes. Whether you’re thinking about your next chapter, exploring growth opportunities, or just curious about the current market, let's have a conversation. Interested in learning more about this landmark sale or discussing your dealership’s value? Let’s talk. 📞 Contact Alan Haig at [email protected] or (954) 646-8921 for a confidential conversation.📞 Because your life’s work deserves nothing less than exceptional. Read the full story here: https://bit.ly/3CWJHjN #ToyotaDealerships #AutoDealers #HaigPartners #DealershipSuccess #AutoRetail #BuySellAdvisor

Agency U-Turn? Ford Europe has reportedly backed away from its planned shift to agency sales and returned to the embrace of franchise dealer partners, says Autocar. As noted by Automotive News, other companies like Stellantis, BMW, Audi and Land Rover have also delayed or revised their plans for agency sales. It feels to me like carmakers felt bullish about a more direct-to-consumer model with set prices when the going was good and profits were there for the taking. By this I mean, when there was more demand than supply in the COVID market, and no danger of excess inventory weighing down the balance sheet. Now that cars are piling up, incentives are back, and dealers with core competencies in moving metal and holding stock become valuable again. Cox Automotive Australia works with automotive OEMs and dealers alike, so we're agnostic and see merit in both models depending on the brand. Irrespective of everything else. it's vital that dealers embrace an omnichannel model that seamlessly blends physical and digital into one singular customer experience. Tell me, do you see Australian-based auto OEMs freezing their plans to go to agency-type models? And do we need ongoing franchise code reform? Links: https://lnkd.in/gNjNnSKt https://lnkd.in/g9J2ZVBf Cox Automotive Inc. Motor Trades Association of Australia Australian Automotive Dealer Association (AADA) Stephen Lester #Agency #CX #dealer #franchise

Recently, Tom had an insightful conversation with an executive from a large auto group focused on used inventory. He reminded me of something crucial - franchise dealers often have a steady stream of high-quality trade-ins thanks to their brand affiliations. Independent dealers, however, face a tougher challenge. They rarely get the same level of trades, making the need to source high-quality cars even more critical. That's where sourcing from private parties becomes a game-changer. For independent dealers, it's an opportunity to level the playing field and stock their lots with top-tier vehicles. Learn more: https://hubs.la/Q02L8wdx0

Highlights from our year-end 2023 Franchise Activity Report (FAR) are LIVE on our Insight Lab! Check out the industry's most reliable source of dealership statistics to learn about what happened across the U.S. automotive retail network last year. #automotive #automotivenews #automotivedata #study #dealerships #dealernetwork

Stellantis, Audi, JLR and now Ford. There is a gradual but definite shift in the #automotive industry’s approach to sales models, as companies reassess their strategies in shift to feedback from consumers and dealers. Several auto OEMs had previously announced plans to move to an agency model in the near future. This would have given dealers a fixed fee for each sale, while allowing the OEM to have greater control over the entire buying journey. However, in the past few months, many of these OEMs have announced a change in plans, or a slowdown in the rollout of these plans, the most recent being Ford. Nearly two years ago, Ford’s CEO had envisioned a future where Ford dealers would adopt the agency model with 100% digital sales, no inventory, and fixed pricing, thereby operating entirely digitally. However, concerns from dealers and the results of a trial in the Netherlands led Ford to reconsider this approach, especially in Europe. According to Ford “We’ve evolved pretty much our thinking to become what we call an ‘advanced franchise’ model, where we use the latest systems to get more insights about customers, and we can really follow the customer journey end to end, while still keeping the franchise partner as the very important backbones of our system.” Ford recognizes that buying a car is a significant investment for European customers who prefer not to complete the entire transaction online. Ford initially anticipated a quicker shift to digital transactions but found that customers value physical interactions, not only to get the test drive but also to have physical guidance during the transaction process. In Feb this year, JLR made a similar announcement, cancelling plans to move to an agency model and is instead refocussing its franchised model with an 'elevated concierge levels of client care’. JLR had been working on the move to agency for over two years and was originally planning to move to a 'direct to consumer' model this year. Audi was also due to bring in ‘agency sales’ for its entire electric range at the end of April, but its dealers have been told this is now being quietly pushed back. And in late 2023, Stellantis revised rollout of agency model in Europe after IT issues in pilot markets. The automaker had sought to apply agency distribution uniformly across Europe. Two steps were planned: first, the premium brand cluster (Alfa Romeo, DS and Lancia) and light commercial vehicles from 2024, followed by the volume brands (Citroen, Fiat, Jeep, Opel/Vauxhall, Peugeot) from 2027. Stellantis is now moving to a country-by-country approach to the agency distribution model rather than by brands and will be complete by 2026 in 10 large markets. https://lnkd.in/eDQivrbE #automotive. #directtoconsumer

Thank you, Cox Automotive Inc., for including data from the Q4 2023 Haig Report®, highlighting the blue sky multiples for the Toyota North America and Lexus brands. "The extent to which these two brands drive profit is staggering. According to Cox Automotive Inc.'s analysis, Toyota and Lexus dealers captured 29% of the industry’s total new car gross margin in February, despite their combined dealer network representing only 9% of the nation’s dealerships. This math helps explain why the average Lexus dealer blue sky valuation from Haig Partners is 8-10x earnings, and Toyota is 7-8x earnings, both best in class for luxury and non-luxury franchises." https://lnkd.in/e6Priy5F #dealershipbluesky #bluesky #HaigReport #Toyota #Lexus #dealershipbuysell

Lithia Motors is expanding its presence in the Southern states with a significant acquisition in Memphis. The company has purchased Sunrise Wolfchase Buick GMC and Sunrise Buick GMC Collierville from Sunrise Auto Group. These top-performing dealerships will continue their legacy under Lithia's ownership, promising further growth in the high-demand Tennessee market. Discover more about this strategic move and its impact on the automotive landscape. #LithiaMotors #BusinessGrowth #AutobodyNews

■ NADA, association leaders respond to Scout’s direct sales strategy: A call to action for dealers! ■ “Buying a car is not like buying a tube of toothpaste on Amazon. You don’t trade in your toothpaste; you don’t finance your toothpaste. There are a lot of different aspects to this, and it’s... the franchise system is best positioned to take care of this, and that’s been proven time and time again.” — Mike Stanton. By Jaelyn Campbell, CBT News ■ In a critical discussion on Inside Automotive, Mike Stanton, CEO and President of NADA, and John Devlin, President of the Pennsylvania Automotive Association and the Automotive Trade Association Executives’ 2024 Chairman, address the implications of Volkswagen’s Scout Motors deciding to sell vehicles directly to consumers. This controversial move raises significant concerns for existing dealerships and the franchise model, prompting NADA and state associations to prepare for a robust response. ■ During the interview, Stanton emphasized that NADA is working closely with state and metro dealer associations to counter Volkswagen’s decision, which they view as a betrayal of the longstanding dealer-manufacturer relationship. He highlighted the importance of maintaining this partnership, stating, “There are over 600 VW dealers in this country… over 50,000 people in this country work for Audi, VW, and Porsche dealers.” This emphasizes the consequential economic impact these dealerships have on local communities and the automotive ecosystem as a whole. ■ Meanwhile, Devlin notes Volkswagen’s disappointing lack of communication, suggesting that their silence has led to this anticipated but disheartening decision. He pointed out that Volkswagen’s direct sales approach might hinder its existing U.S. dealer network, stating, “Trust is important in any relationship,” and indicated that the current environment threatens to shatter this trust.  ■ Both leaders expressed concerns that this move could damage the consumer experience, as many direct sellers have struggled with service levels. Nevertheless, these industry leaders also touched on the potential challenges Volkswagen might face in terms of regulatory compliance across various states. Devlin pointed out that “they can’t get licensed in most of the states, if not all the states around us,” stressing the complexity of navigating the franchise laws that protect dealerships. Source: https://lnkd.in/gbQyT8SV #ScoutMotors #Dealers #dealership #Cardealer #Nada