Although auto dealers feel more pessimistic about near-term earnings than they've been in two years, according to The Presidio Group's Midyear 2026 Dealer Direction Survey, overall confidence for the industry remains strong.
Driving the news: From May 6 to June 15, Presidio's survey fielded answers from 269 dealers and dealership group executives that represent more than 4,200 franchised stores. Questions covered profits, valuations, brand sentiment, and the buy-sell market.
Presidio's net profitability optimism score, which measures the difference between dealers expecting profits to rise and those expecting profits to fall, came in at -21.1%. That's the weakest it's been since mid-2024, when it was -48.7%.
About 44% of respondents expect profits to decline over the next 12 months, while only 23% expect gains.
But, 42% expected gains in the next three years, while 36% predict a decline.
Between the lines: Shrinking vehicle margins and rising costs were the main drivers of concerns for the dealers who responded. One dealer wrote that they'd have to “get a lot better just to keep up with what we did in 2024 and 2025.”
And, as has been reported, dealers are leaning into other departments to boost profits.
About 80% of dealers said they now lean on fixed ops as a top profit driver.
More than half (57%) said F&I is carrying earnings.
Nearly 48% cited tech-driven efficiency and productivity gains.
"We are buying cars to drive F&I and service at this point," one dealer wrote.
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Market vibes still good: Despite all of the above, more than three-quarters of respondents (78%) said they expect dealership values to stay stable or rise in the next 12 months.
Presidio President George Karolis told CDG News that the short-term pessimism is largely tied to external factors, such as geopolitical tensions, the Iran conflict, and high gas prices.
But as the results show, dealers still believe in the proven dealership model.
"It's moving around, it's evolving,” Karolis said. “Two thirds of those dealers that took the survey are looking to grow, and that continued support continues to support this supply and demand imbalance in terms of M and A that favor sellers again, albeit much more of a focus on brand and geography."
George Karolis
The Presidio Group
On brand: The top six franchises, Toyota, Lexus, Honda, Subaru, Mercedes-Benz and BMW, held steady.
Notable shifts in the rest of the rankings:
Chevrolet climbed to No. 8, its highest ranking ever
Porsche fell three spots to No. 10, its lowest since the survey's inception
Nissan rose five spots to No. 19, its best showing since the survey began, on improved leadership and product direction
Audi and Volvo both fell three spots, hitting brand lows
"There's more of a flight to quality than there's been more divergence, and then the lower tier brands were struggling a little bit more," Karolis said.
Zooming out: On the macro front, nearly half (45%) of respondents said their business has felt impacts tied to the Iranian conflict and/or broader geopolitical tensions.
Among those reporting impacts:
70% cited reduced customer demand or consumer confidence
67% pointed to higher operating costs including fuel and transportation
33% reported shifts in the types of vehicles customers are shopping for
Affordability concerns were cited most, by 66% of respondents, while direct sales and Chinese automakers topped long-term structural concerns.
The share of dealers viewing Chinese entrants primarily as a threat rose to 40% in mid-2026 from 34% at the end of last year.
Nearly 47% viewed them as both opportunity and threat, reflecting a conflicted view of a disruptor that could also create franchise opportunities.
The takeaway: Karolis said the majority of dealers remain “excited and exuberant about the business and weathering short-term headwinds.”
“[They are] considering the future risks and adapting with technology and adapting with portfolio management…," Karolis said.
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