Why an Acquisition can be Positive for your Dealership

Why an Acquisition can be Positive for Your Dealership

Dealers today are being confronted with the reality of acquisition consolidation throughout the automotive industry. The dealerships themselves are often acquired by large dealer groups or even competition. Agency partners, administrators, and others are also impacted by consolidation – agencies buy agencies, administrators partner together, and other companies are joining to grow business. Many industry experts predict that consolidation will be an ongoing trend, so it’s important to think about the future and how best to plan for how your dealership can keep its identity if it joins another group.

Dealership Acquisitions

There are specific reasons why a dealership might be acquired. The main reason is due to the performance of that dealership overall. Those that are outperforming their competitors can expect that they will receive their fair share of acquisition offers. A successful business is prime for acquisition. However, dealers aren’t going to be acquired unless they want to be!
When a dealership is acquired, they can grow their footprint by leaps and bounds. More often than not, acquisitions are a great deal for dealerships and the acquiring group alike. Being part of a larger group can protect dealers from being left behind due to lack of resources.

Growing in Unexpected Ways

One concern of dealership owners who are concerned about acquisition is that they don’t want to sacrifice their ability to serve their customers in the ways that they always have before. Dealers work hard to build strong relationships with their customers and community, and don’t want to lose that recognition. However, many dealers find that being a part of a larger team may be beneficial. Dealers may have access to:

Strong Resources – Larger companies have great access to more resources. They can make deals with suppliers that smaller players in the industry simply cannot. They also have the time and history to identify the best suppliers for various pieces of equipment and supplies. This vast network allows the biggest players in the industry to set themselves apart in the field. Dealers can also look forward to the benefit of larger IT, marketing, and service teams to help make sure that customers are taken care of in the most efficient way possible.
More Focused Customer Experience – Consolidation doesn’t have to be a negative thing as far as the customer experience is concerned. Having a larger business partner that can take over some of the day-to-day tasks that dealers had previously handled entirely on their own. The automated systems many larger groups use also make customer outreach easy and fast to accomplish.
Greater Financial Stability – Dealers also enjoy the benefits of greater financial stability when they have a larger business partner to assist with paperwork, reporting, and more. Having a team to handle mundane tasks gives finance managers more time to spend with customers working on sales.

How Acquisitions Will Impact the Automotive Industry

The automotive shift has been changing rapidly since 2020, and will continue to evolve for the foreseeable future. As dealers consider the future, factoring in the possibility of acquisition is a must.

We encourage dealers and agents to contact us to learn how Automotive Product Consultants can power a post-sale vehicle marketing program that will drive sales and revenue for your dealership. Reach out to us today for a free program demo.

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