Tariff concerns aren’t having a major impact on dealer optimism about profitability and dealership value (at least not yet).
The details: Sentiment among dealers for both profitability and value are up and up quite substantially by some standards, as detailed in the Presidio Midyear 2025 Dealer Direction Survey.
72% expect profitability to stay the same or improve over the next 12 months—up from 65% at year-end 2024 and 37% a year ago.
75% expect dealership values to stay the same or improve over the next 12 months—up from 64% at year-end 2024 and 45% in mid-2024.
Digging in: The bullish outlook about the dealer market is credited to a few factors, including dealership profitability stabilizing and costs—with the typical U.S. franchised store posting its first overall post-pandemic gain in pretax profit in Q1 of 2025, according to Presidio.
That said, several dealers indicate that automaker margin practices, and regulatory rules could pressure profitability in the long run.
What they’re saying: “Once tariffs and economic uncertainty [is] absorbed, consumers will be more willing to purchase new vehicles. Better new vehicles on the way will also stimulate sales. More [units in operation] will result in more labor and parts sales for fixed operations,” said one dealer respondent to Presidio’s midyear survey.
Why it matters: Dealers’ bullish outlook could go a long way in helping to boost and sustain team morale among dealer groups when facing industry headwinds—all while pushing dealerships to think more strategically about how to address market challenges.
Between the lines: Amid all the dealer optimism, the political environment (specifically as it relates to President Trump) continues to keep dealers a bit on edge—with most of that skepticism attributed to tariffs.
Nearly a third of dealer respondents have a more negative view of automotive retail’s 2025 prospects than just after the election.
Another third of the dealers surveyed were unsure or unchanged in their sentiment following Trump’s 2024 presidential win.
36% of the respondents to the Presidio study indicated that they were more optimistic about 2025 prospects than they were right after the election.
“Tariffs are on and then off and then on and then slightly off. It’s so difficult to keep track of what’s going on,” said another respondent.
Bottom line: Despite political uncertainty and ongoing tariff concerns, U.S. auto dealers remain largely optimistic about profitability and dealership values heading into 2025—buoyed by recent profit gains, stable costs, and expectations of stronger vehicle demand. However, long-term risks like automaker margin pressure and regulatory challenges still loom.

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