Welcome to another edition of the Car Dealership Guy Podcast Recap—a rundown of key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Alan Haig, President of Haig Partners.
Alan breaks down the massive valuation gap between "Blue Chip" brands like Toyota and the struggling "Zero Blue Sky" franchises, while revealing why 15x multiples are still happening in today's market.
Chinese OEM entry could gut franchise Blue Sky values across the board.
Australia is the cautionary tale: Chinese brands entered, margins went to zero across the industry, and suddenly no one could sell a franchise for meaningful blue-sky value.
"Can you sell a franchise today in that country for meaningful blue sky if it's not clear that Nissan, Hyundai, Kia, Toyota, Ford, you name it, is going to uh survive in any form or fashion that they have been for the past 100 years?"
Haig says Chinese brands have already taken 15-20% share in Europe in under five years, which is why he takes the Australia example seriously as a preview of what U.S. market entry could look like.
Proposed U.S. legislation would ban Chinese-controlled automakers from the market entirely.
Senator Moreno introduced a bill at the New York Auto Show that would block the sale of any vehicle made by or controlled by Chinese entities in North America.
"The bill is going to be written so that it would ban the importation, manufacture, or sale of vehicles made in China or by Chinese companies in North America or by companies controlled by Chinese entities."
Haig says that would extend to Volvo, currently owned by Geely, which would be required to divest even though it has a manufacturing plant in the U.S.
Dealer profits per store have doubled since pre-COVID, and the reset looks permanent.
Six straight years of elevated earnings have left dealers with cash reserves, paid-down debt, and the financial firepower to move fast when the right store comes available.
"Before COVID, the average publicly traded dealership was making less than $2 million per rooftop. Today, it's over four."
F&I profits and fixed operations, as he explained, have both grown significantly and are holding, which is why he views at least part of the profit reset as permanent rather than cyclical.
The Volkswagen dealer meeting at NADA was the worst manufacturers meeting dealers had ever attended.
Dealers described a leadership team with no institutional history, no clear answers, and no Germans in the room for a brand that is ultimately a German decision.
"They basically said it was the worst manufacturing meeting they'd ever attended in their careers. Where the Volkswagen management team was all new. None of them had a history there. Nobody really knew them. And they weren't really able to you know share a vision for the future that made Volkswagen dealers encouraged."
Haig's view: Volkswagen had a head start on EVs after Dieselgate, poured billions into EVs, and never captured meaningful market share. The lack of a vision dealers can rally behind is a continuation of that same problem.
Presented by:
1. Overfuel - Overfuel is the new technical standard in automotive websites, proven to grow sales by 30%+. Whether you need more revenue or better support, they’ve got you covered. Visit @ here and enter code CDG500 to get $500 OFF a new website.
2. Siro - Siro’s AI gives dealerships full visibility into every conversation. It records, transcribes, and analyzes in-person conversations. Proactively flagging compliance issues, missed revenue opportunities, and training gaps. Go to @ here to learn more
3. Haig Partners - Public retailers cite it. National media trusts it. Dealers rely on it. The Haig Report® sets the standard for dealership M&A data and trends in auto retail. Read it @ here.
Toyota stores are trading at 15x multiples — and buyers are still lining up.
A store making $3 million recently sold for $44 million in blue sky, and the reason is what Toyota does for an underperforming store's inventory allocation in year one.
"Now, the nice thing about buying a Toyota store is if the store that you're buying is underperforming in terms of their sales effectiveness, Toyota will allocate you enough inventory in your first year to become 90% sales effective. So if a store is at 60% sales effective and you get to 90%, that's a 50% lift in new vehicle sales in your first year."
Naturally, that’s why he says some buyers are approaching top Toyota and Lexus stores less like growth investments and more like buying a bond, because they’re steady, reliable, and hard to replace.
Mercedes-Benz values are rising after years of EV missteps and a restrictive acquisition policy.
New executive Adam Chamberlain, who previously ran Mercedes North America and worked with Lithia, is resetting the brand's U.S. strategy on products, pricing, and who's allowed to buy stores.
"He's focused on on volume again. He wants to go from 300,000 units to 400,000 units and try to reclaim that luxury crown that was taken by BMW and Lexus."
According to Haig, opening acquisitions to non-Mercedes dealers has widened the buyer pool, and combined with better products and more volume, that's what's driving valuations higher.
Audi has taken a double hit on profits and multiples, but may be near the bottom.
No U.S. manufacturing left Audi more exposed to tariffs than BMW or Mercedes, and a stale product lineup compounded the pain, leaving stores at a steep discount to their German-brand neighbors.
"Audi is easily the least expensive German brand. I don't even know what the factor is. It could be between five and ten times less valuable than a Mercedes store sitting right next to it or BMW store sitting right next to it."
Still, product cycles drive sales, and with the Q5 just relaunched and the Q3 coming, this could be the start of Audi's recovery. Haig Partners has already closed two Audi deals this year.
Infiniti and Lincoln are trading at zero Blue Sky, and some stores are just closing.
Infiniti has lost roughly two-thirds of its market share over the past five to six years, and the cascade effect (fewer new sales, fewer trades, shrinking fixed ops) leaves some stores unable to cover fixed costs.
"Many Infiniti stores today are making nothing or in fact losing money. So some of them have said okay I've had enough fun here. I can't recruit management to turn this around."
Because of that, Haig says some owners are converting real estate into used-vehicle operations for growing brands rather than continuing to fight a franchise that's lost two-thirds of its volume.
AI tools are starting to lift sales per salesperson by around 30% at some dealer groups.
One large dealer group owner shared data showing a 30% increase in sales per salesperson tied directly to AI tools, which is a number that matters because sales productivity per head has barely moved in roughly 80 years.
"That's something that's encouraging to me, not just because sales people can make more money, which means they'll stick around longer, but it also a lot more profitable for auto dealers."
Haig says fewer salespeople handling more volume also means lower turnover, less training cost, and a more profitable store.
When California's CARB exemption ended, the same stores drew offers 25-30% higher.
Haig Partners had two California groups under process earlier in the year, took lower-than-expected bids, and waited, mainly banking on a regulatory shift to change the math.
"Then CARB goes away, we remarketed, and [in] one case [we] got 25% higher offer, and the other one's a 30% higher offer. Same brands, same location, about the same performance."
Haig says that's why, when a process doesn't produce the expected value, sometimes the right move is to wait for market conditions to change rather than accept a low offer.
