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Weighing the Future of ‘Mom & Pop” Dealerships

<!DOCTYPE html><html lang="en"><head><meta charSet="utf-8"/><meta name="viewport" content="width=device-width,initial-scale=1"/><meta name="robots" content="max-image-preview:large"/><title>Weighing the Future of ‘Mom &amp; Pop” Dealerships</title><meta name="description" content="Location, brand and succession plans are among the factors that play into the future of dealerships."/><meta property="og:title" content="Weighing the Future of ‘Mom &amp; Pop” Dealerships"/><meta property="og:description" content="Location, brand and succession plans are among the factors that play into the future of dealerships."/><meta property="og:url" content="https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships"/><meta property="og:type" content="article"/><meta property="og:image" content="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt462cd2b53152c055/661951347598239d64fad7d0/0223jhMomandPop.jpg?disable=upscale&amp;width=1200&amp;height=630&amp;fit=crop"/><meta property="oc:keywords" content="Dealers"/><link rel="canonical" href="https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships"/><script type="application/ld+json">{"@context":"https://schema.org","@type":"Article","datePublished":"2023-03-03T11:30:00.000Z","dateModified":"2024-04-17T16:21:08.464Z","headline":"Weighing the Future of ‘Mom & Pop” Dealerships","mainEntityOfPage":"https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships","image":{"@type":"ImageObject","url":"https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt462cd2b53152c055/661951347598239d64fad7d0/0223jhMomandPop.jpg","caption":"Small dealership operations have some advantages over large consolidators, says Haig.","creditText":"Getty Images"},"author":[{"@type":"Person","name":"Jim Henry","image":"https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/bltfff9a2c9f0edaa9d/665a537c715726169481242f/Jim_Henry.jpg","url":"https://www.wardsauto.com/author/jim-henry"}]}</script><script type="application/ld+json">{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://www.wardsauto.com"},{"@type":"ListItem","position":2,"name":"Dealers","item":"https://www.wardsauto.com/dealers"}]}</script><link rel="preload" href="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt462cd2b53152c055/661951347598239d64fad7d0/0223jhMomandPop.jpg?width=1280&amp;auto=webp&amp;quality=10&amp;format=jpg&amp;disable=upscale&amp;blur=40" as="image"/><meta property="twitter:card" content="summary"/><script type="text/javascript">window.NREUM||(NREUM={});NREUM.init={distributed_tracing:{enabled:true},privacy:{cookies_enabled:true},ajax:{deny_list:["bam.eu01.nr-data.net"]}}; ;NREUM.loader_config={accountID:"3936348",trustKey:"3288925",agentID:"538600226",licenseKey:"NRJS-26ae6a3b09493bbcc87",applicationID:"538600226"}; ;NREUM.info={beacon:"bam.eu01.nr-data.net",errorBeacon:"bam.eu01.nr-data.net",licenseKey:"NRJS-26ae6a3b09493bbcc87",applicationID:"538600226",sa:1}; ;/*! 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src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blte6f0603953604aa7/6740a109389d689fc975824a/Electronica2024.jpg?width=700&amp;auto=webp&amp;quality=80&amp;disable=upscale" loading="lazy" alt="" title=""/></div></a><a data-component="keyword" class="Keyword Keyword_variant_standard Keyword_title_softwareDefinedVehicles ContentPreview-Category" data-discover="true" href="/vehicles/software-defined-vehicles">Software Defined Vehicles</a><div class="VerticalCard"><div class="VerticalCard-Body"><a class="VerticalCard-Title VerticalCard-Title_displayOption_default" data-testid="preview-default-title" data-discover="true" href="/software-defined-vehicles/electronica-2024-five-takeaways">Electronica 2024: Five Takeaways</a><a class="VerticalCard-Title VerticalCard-Title_displayOption_mobile" data-testid="preview-mobile-title" data-discover="true" href="/software-defined-vehicles/electronica-2024-five-takeaways">Electronica 2024: Five Takeaways</a><div class="Contributors 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class="Layout-Section"><div id="iiris-identity" data-testid="iris-identity"></div><div data-template="article"><div class="TwoColumnLayout"><div id="portal-root"></div><div class="TwoColumnLayout-Head"><div class="ArticleBase-Header"><ul class="ArticleBase-Topics" data-testid="article-topics"><li class="ArticleBase-Topic"><a data-component="keyword" class="Keyword Keyword_variant_category Keyword_title_dealers" data-discover="true" href="/dealers">Dealers</a></li></ul><div><h1 class="ArticleBase-HeaderTitle"><noscript><span class="ArticleBase-LargeTitle">Weighing the Future of ‘Mom &amp; Pop” Dealerships</span></noscript><span class="ArticleBase-DefaultTitle" data-testid="article-default-title">Weighing the Future of ‘Mom &amp; Pop” Dealerships</span></h1><p class="ArticleBase-HeaderSummary" data-testid="article-summary">Location, brand and succession plans are among the factors that play into the future of dealerships.</p></div></div></div><div class="TwoColumnLayout-Content"><div class="TwoColumnLayout-Body"><div class="ArticleBase-Body" data-testid="article-base-body"><div class="ArticleBase-Contributors" data-testid="article-base-contributors"><div class="Contributors Contributors_variant_normal Contributors_hasAvatar" data-component="contributors"><div class="Contributors-AvatarWrapper"><a class="Contributors-AvatarLink" aria-label="Jim Henry" data-discover="true" href="/author/jim-henry"><img aria-hidden="true" data-testid="contributor-avatar" data-component="image" class="Contributors-Avatar" data-src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/bltfff9a2c9f0edaa9d/665a537c715726169481242f/Jim_Henry.jpg?width=100&amp;auto=webp&amp;quality=80&amp;disable=upscale" src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/bltfff9a2c9f0edaa9d/665a537c715726169481242f/Jim_Henry.jpg?width=100&amp;auto=webp&amp;quality=80&amp;disable=upscale" loading="lazy" alt="Picture of Jim Henry" title="Picture of Jim Henry"/></a></div><div class="Contributors-InfoWrapper"><a class="Contributors-ContributorName" data-testid="contributor-name" data-discover="true" href="/author/jim-henry">Jim Henry</a><span class="Contributors-ContributorTitle" data-testid="contributor-title">, <!-- -->Contributor</span><p class="Contributors-Date" data-testid="contributors-date">March 3, 2023</p></div></div><div data-component="article-read-time" class="ArticleReadTime ArticleReadTime_size_normal"><span data-component="icon" data-name="Clock" class="ArticleReadTime-Icon" style="mask-image:url(/build/_assets/Clock-MSX4SBCD.svg);-webkit-mask-image:url(/build/_assets/Clock-MSX4SBCD.svg);mask-repeat:no-repeat;-webkit-mask-repeat:no-repeat;-webkit-mask-position:center;-webkit-mask-size:contain"></span><span>4 Min<!-- --> <!-- -->Read</span></div></div><div class="ArticleBase-FeaturedImageWrapper" data-testid="featured-image"><div data-component="captioned-content" class="CaptionedContent"><div class="CaptionedContent-Content"><img data-component="image" class="ArticleBase-FeaturedImage" data-src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt462cd2b53152c055/661951347598239d64fad7d0/0223jhMomandPop.jpg?width=1280&amp;auto=webp&amp;quality=95&amp;format=jpg&amp;disable=upscale" src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt462cd2b53152c055/661951347598239d64fad7d0/0223jhMomandPop.jpg?width=1280&amp;auto=webp&amp;quality=95&amp;format=jpg&amp;disable=upscale" loading="eager" alt="0223jhMomandPop" title="0223jhMomandPop"/></div><div class="CaptionedContent-Caption" data-testid="captioned-content-caption">Small dealership operations have some advantages over large consolidators, says Haig.<span class="CaptionedContent-CreditTo">Getty Images</span></div></div></div><div class="SocialShare"><div data-component="social-share" class="SocialShare SocialShare_variant_button ArticleBase-SocialShare ArticleBase-SocialShare_first"><a target="_blank" rel="noreferrer" 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ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">DALLAS –  Can “Mom &amp; Pop” dealerships survive in the current era of auto retail consolidation, or has every local market reached the point of “grow, or die?”</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">The answer, naturally, is that “it depends,” according to panelists at a recent Auto Team America conference.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">It depends on the brand, it depends on the market, it depends on whether ownership has a succession plan, and it depends on whether the owners even want to stay in business or sell out to take advantage of today’s sky-high seller’s market, say industry insiders.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">“A Toyota store anywhere in the country is probably going to be fine. A high-volume, single-point store is probably going to be fine,” says dealership broker Alan Haig, president of Haig Partners, Fort Lauderdale, FL. But the outlook is different for “a typical store in a typical town,” he says. Without a strong brand, or without a market that somehow lacks much local competition, he says the typical small operation is likely to slowly “bleed away” its business to bigger competitors.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">In a separate talk with Wards, a Haig competitor says something similar: “Sure, if it’s a Toyota store,” dealership broker Erin Kerrigan says when asked whether small dealerships can survive. Kerrigan is founder and managing director of Kerrigan Advisors, Irvine, CA.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">In a recent report, Haig Partners rates Toyota No.1 among mass-market brands, after luxury brands Porsche, Lexus, Mercedes-Benz and BMW, in terms of the multiple which buyers are willing to pay, times earnings, to purchase a franchise. Honda and Subaru also rank highly.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">Still, Haig says small dealership operations have some advantages over large consolidators. A big one is that franchise laws require automakers to sell new vehicles to mom-and-pop dealerships at the same dealer invoice price as megadealer groups, he says.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">In that sense, “there are almost no economies of scale in this business,” Haig says. Every Ford dealer pays the same for an F-150 pickup, he points out. “Having a big (dealership) group doesn’t help me buy those at better prices,” he says.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">Automaker framework agreements, which limit the number of franchises a single ownership structure can own, have also slowed consolidation. </span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">Nevertheless, buy-sell volume has greatly increased since the pandemic. A major change in the past few years, besides the new-vehicle shortage, is the widespread consumer acceptance of e-commerce in auto retail, and the willingness to shop online for cars and trucks at dealerships a long distance away, Haig says.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">“Carvana made it possible,” he says, despite Carvana’s present financial woes. That’s because Carvana demonstrates consumers are willing to buy a car or truck “sight unseen, if the convenience was there,” he says.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">“The shortage has jacked up our profits, but it’s also changed consumer behavior,” Haig says.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">As a result, chains such as Lithia &amp; Driveway Motors, Medford, OR, are competing on the strength of having the biggest online inventory. That’s a huge competitive advantage, especially amid the current inventory shortage.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">“This is how public companies are going to differentiate themselves,” Haig says. He says Lithia recently listed around 48,000 new and used cars and trucks on its Driveway e-commerce platform. “I don’t know if there’s another dealership group in the country that can offer all that online,” Haig says.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">In a separate conference “fireside chat”-style presentation between Haig and Bryan DeBoer, president and CEO of Lithia &amp; Driveway, DeBoer says Driveway customers had their purchases shipped an average of 911 miles (1,467 km) (shipping is free over shorter distances).</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">“Within 40 miles (64 km), you might have one or two buyers for a particular car,” DeBoer says. “But there are hundreds of buyers if you make it available all over the country.”</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">Not everybody subscribes to e-commerce as fully as Lithia &amp; Driveway. Another conference speaker, Tom Doll, president and CEO of Subaru of America, says he believes one-on-one relationships at the dealership encourage brand loyalty and dealership loyalty.</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">“I would say that I think e-commerce has a place, but that for a brand like Subaru, we want to stress the importance of the relationship the retailer develops with the customer,” Doll says.   “Therefore, it is important to have the customer come into the store to experience the product and also where they can see, feel, smell and otherwise fall in love with the car.”</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text">As for small dealership operations? Doll says, “I do think there is a role for the mom-and-pop dealership and they should be able to hold their own as they always have done.”</span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text"> </span></p><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNormal" data-testid="content-text"> </span></p></div></div><div class="SocialShare"><div data-component="social-share" class="SocialShare SocialShare_variant_button ArticleBase-SocialShare ArticleBase-SocialShare_second"><a target="_blank" rel="noreferrer" aria-label="Linkedin" href="https://www.linkedin.com/sharing/share-offsite/?url=https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships"><span class="SocialShare-IconWrapper SocialShare-IconWrapper_variant_button"><span data-component="icon" 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class="ContributorSummary ContributorSummary_variant_author"><div class="ContributorSummary-ImageWrapper ContributorSummary-ImageWrapper_variant_author"><a data-testid="contributor-summary-img-link" data-discover="true" href="/author/jim-henry"><img data-component="image" class="ContributorSummary-Image ContributorSummary-Image_variant_author" data-src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/bltfff9a2c9f0edaa9d/665a537c715726169481242f/Jim_Henry.jpg?width=400&amp;auto=webp&amp;quality=80&amp;disable=upscale" src="https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/bltfff9a2c9f0edaa9d/665a537c715726169481242f/Jim_Henry.jpg?width=400&amp;auto=webp&amp;quality=80&amp;disable=upscale" loading="lazy" alt="Jim Henry" title="Jim Henry"/></a></div><div class="ContributorSummary-InfoWrapper ContributorSummary-InfoWrapper_variant_author"><div class="ContributorSummary-TitleWrapper"><a data-testid="contributor-summary-title-link" data-discover="true" href="/author/jim-henry"><p class="ContributorSummary-Title ContributorSummary-Title_variant_author" data-testid="contributor-summary-title">Jim Henry</p></a></div><div class="ContributorSummary-SubTitleWrapper ContributorSummary-SubTitleWrapper_variant_author"><p class="ContributorSummary-SubTitle ContributorSummary-SubTitle_variant_author" data-testid="contributor-summary-subtitle">Contributor</p></div><div class="ContributorSummary-ContentWrapper ContributorSummary-ContentWrapper_variant_author"><div class="ContributorSummary-Content ContributorSummary-Content_variant_author" data-testid="contributor-summary-content"><p class="ContentParagraph ContentParagraph_align_left" data-testid="content-paragraph"><span class="ContentText ContentText_variant_bodyNoneStyle" data-testid="content-text">Jim Henry is a freelance writer and editor, a veteran reporter on the auto retail beat, with decades of experience writing for Automotive News, WardsAuto, Forbes.com, and others. He&#x27;s an alumnus of the University of North Carolina - Chapel Hill, where he was a Morehead-Cain Scholar. </span></p></div></div></div><div class="ContributorSummary-SeeMore"><a data-component="button" class="Button Button_size_medium Button_variant_textLink" rel="" data-discover="true" href="/author/jim-henry"><span class="Button-ContentWrapper"><span class="ContributorSummary-SeeMoreText"><span>See more from <!-- -->Jim Henry</span><span data-component="icon" data-name="ChevronRight" class="ContributorSummary-SeeMoreIcon" style="mask-image:url(/build/_assets/ChevronRight-NHDKEYGJ.svg);-webkit-mask-image:url(/build/_assets/ChevronRight-NHDKEYGJ.svg);mask-repeat:no-repeat;-webkit-mask-repeat:no-repeat;-webkit-mask-position:center;-webkit-mask-size:contain"></span></span></span></a></div></div></div></div><div data-module="newsletter-signup-promo"><div class="SubscribeBannerTopicPage SubscribeBannerTopicPage_mode_dark SubscribeBannerTopicPage_variant_vertical ArticleBase-Newsletter"><div class="SubscribeBannerTopicPage-Content"><div class="SubscribeBannerTopicPage-Title" data-testid="subscribeBannerTopicPage_title">Subscribe to a WardsAuto newsletter today!</div><div class="SubscribeBannerTopicPage-Message" data-testid="subscribeBannerTopicPage_message">Get the latest automotive news delivered daily or weekly. 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He's an alumnus of the University of North Carolina - Chapel Hill, where he was a Morehead-Cain Scholar. "}]}]}],"gatedWithExternalForm":false,"gatedWithSiteReg":false,"paidGating":false,"sponsorName":""},"template":{"breadcrumbs":[{"url":"/","title":"Home"},{"url":"/dealers","title":"Dealers"}],"topics":[{"__typename":"TopicPrimary","title":"Dealers","url":"/dealers"}],"subBrand":null,"searchParams":{},"summary":"Location, brand and succession plans are among the factors that play into the future of dealerships.","title":"Weighing the Future of ‘Mom \u0026 Pop” Dealerships","mobileHeadline":"Weighing the Future of ‘Mom \u0026 Pop” Dealerships","authoredBy":"Jim Irwin Editor","authoredOn":"2023-03-03T13:09:50+00:00","oldUrl":"https://www.wardsauto.com/dealers/weighing-future-mom-pop-dealerships","buyersJourney":"","contributors":[{"title":"Jim Henry","name":"Jim Henry","companyName":"","role":"Contributor","avatar":"https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/bltfff9a2c9f0edaa9d/665a537c715726169481242f/Jim_Henry.jpg","link":"/author/jim-henry","tagLine":"Contributor","summary":[{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"Jim Henry is a freelance writer and editor, a veteran reporter on the auto retail beat, with decades of experience writing for Automotive News, WardsAuto, Forbes.com, and others. He's an alumnus of the University of North Carolina - Chapel Hill, where he was a Morehead-Cain Scholar. "}]}]}],"readTime":4,"newsletterSignUpPromo":{"title":"Subscribe to a WardsAuto newsletter today!","message":"Get the latest automotive news delivered daily or weekly. With 6 newsletters to choose from, each curated by our Editors, you can decide what matters to you most.","newsletterId":"blt9fed09ee18792c0b","buttonText":"SUBSCRIBE","variant":"vertical","mode":"dark"},"socialShare":[{"type":"Linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships"},{"type":"Facebook","url":"http://www.facebook.com/sharer/sharer.php?u=https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships"},{"type":"Twitter","url":"http://www.twitter.com/intent/tweet?url=https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships"},{"type":"Reddit","url":"https://www.reddit.com/submit?url=https://www.wardsauto.com/dealers/weighing-the-future-of-mom-pop-dealerships\u0026title=Weighing%20the%20Future%20of%20%E2%80%98Mom%20%26%20Pop%E2%80%9D%20Dealerships"},{"type":"Email","url":"mailto:?subject=Weighing the Future of ‘Mom \u0026 Pop” Dealerships\u0026body=I%20thought%20the%20following%20from%20WardsAuto%20might%20interest%20you.%0D%0A%0D%0A%20Weighing%20the%20Future%20of%20%E2%80%98Mom%20%26%20Pop%E2%80%9D%20Dealerships%0D%0Ahttps%3A%2F%2Fwww.wardsauto.com%2Fdealers%2Fweighing-the-future-of-mom-pop-dealerships"},{"type":"Print","url":"/"}],"publishedDate":"2023-03-03T11:30:00.000Z","keywords":[],"atAGlance":[],"bodyJson":[{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"DALLAS –  Can “Mom \u0026 Pop” dealerships survive in the current era of auto retail consolidation, or has every local market reached the point of “grow, or die?”"}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"The answer, naturally, is that “it depends,” according to panelists at a recent Auto Team America conference."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"It depends on the brand, it depends on the market, it depends on whether ownership has a succession plan, and it depends on whether the owners even want to stay in business or sell out to take advantage of today’s sky-high seller’s market, say industry insiders."}]},{"type":"ad","pos":"300_1v_article"},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"“A Toyota store anywhere in the country is probably going to be fine. A high-volume, single-point store is probably going to be fine,” says dealership broker Alan Haig, president of Haig Partners, Fort Lauderdale, FL. But the outlook is different for “a typical store in a typical town,” he says. Without a strong brand, or without a market that somehow lacks much local competition, he says the typical small operation is likely to slowly “bleed away” its business to bigger competitors."}]},{"type":"ad","pos":"native_1v"},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"In a separate talk with Wards, a Haig competitor says something similar: “Sure, if it’s a Toyota store,” dealership broker Erin Kerrigan says when asked whether small dealerships can survive. Kerrigan is founder and managing director of Kerrigan Advisors, Irvine, CA."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"In a recent report, Haig Partners rates Toyota No.1 among mass-market brands, after luxury brands Porsche, Lexus, Mercedes-Benz and BMW, in terms of the multiple which buyers are willing to pay, times earnings, to purchase a franchise. Honda and Subaru also rank highly."}]},{"type":"ad","pos":"video_v"},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"Still, Haig says small dealership operations have some advantages over large consolidators. A big one is that franchise laws require automakers to sell new vehicles to mom-and-pop dealerships at the same dealer invoice price as megadealer groups, he says."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"In that sense, “there are almost no economies of scale in this business,” Haig says. Every Ford dealer pays the same for an F-150 pickup, he points out. “Having a big (dealership) group doesn’t help me buy those at better prices,” he says."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"Automaker framework agreements, which limit the number of franchises a single ownership structure can own, have also slowed consolidation. "}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"Nevertheless, buy-sell volume has greatly increased since the pandemic. A major change in the past few years, besides the new-vehicle shortage, is the widespread consumer acceptance of e-commerce in auto retail, and the willingness to shop online for cars and trucks at dealerships a long distance away, Haig says."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"“Carvana made it possible,” he says, despite Carvana’s present financial woes. That’s because Carvana demonstrates consumers are willing to buy a car or truck “sight unseen, if the convenience was there,” he says."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"“The shortage has jacked up our profits, but it’s also changed consumer behavior,” Haig says."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"As a result, chains such as Lithia \u0026 Driveway Motors, Medford, OR, are competing on the strength of having the biggest online inventory. That’s a huge competitive advantage, especially amid the current inventory shortage."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"“This is how public companies are going to differentiate themselves,” Haig says. He says Lithia recently listed around 48,000 new and used cars and trucks on its Driveway e-commerce platform. “I don’t know if there’s another dealership group in the country that can offer all that online,” Haig says."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"In a separate conference “fireside chat”-style presentation between Haig and Bryan DeBoer, president and CEO of Lithia \u0026 Driveway, DeBoer says Driveway customers had their purchases shipped an average of 911 miles (1,467 km) (shipping is free over shorter distances)."}]},{"type":"ad","pos":"native_2v"},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"“Within 40 miles (64 km), you might have one or two buyers for a particular car,” DeBoer says. “But there are hundreds of buyers if you make it available all over the country.”"}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"Not everybody subscribes to e-commerce as fully as Lithia \u0026 Driveway. Another conference speaker, Tom Doll, president and CEO of Subaru of America, says he believes one-on-one relationships at the dealership encourage brand loyalty and dealership loyalty."}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"“I would say that I think e-commerce has a place, but that for a brand like Subaru, we want to stress the importance of the relationship the retailer develops with the customer,” Doll says.   “Therefore, it is important to have the customer come into the store to experience the product and also where they can see, feel, smell and otherwise fall in love with the car.”"}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":"As for small dealership operations? Doll says, “I do think there is a role for the mom-and-pop dealership and they should be able to hold their own as they always have done.”"}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":" "}]},{"type":"paragraph","attrs":{"textAlign":"left"},"content":[{"type":"text","text":" "}]}],"contentType":"Article","uid":"bltc88325fedbb56a31","sponsored":{"logoUrl":"","url":"","alt":"","title":"","campaignURL":"","isSponsored":false,"gateWithSiteReg":false,"gateWithExternalForm":"None","externalFormID":""},"featuredImage":{"src":"https://eu-images.contentstack.com/v3/assets/blt7121b6ec5c11097b/blt462cd2b53152c055/661951347598239d64fad7d0/0223jhMomandPop.jpg","alt":"0223jhMomandPop","caption":"Small dealership operations have some advantages over large consolidators, says Haig.","creditTo":"Getty Images"},"contentFormat":{"title":"News"},"seriesTaxonomy":[],"programTaxonomy":[],"sidebarModules":[{"type":"module_content_cards","data":{"title":"Latest 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