Guest commentary: Opportunities for auto dealership consolidation

The U.S. auto dealership industry is experiencing a robust mergers and acquisitions market — and that consolidation is changing the industry landscape. The top 10 dealership groups now own 9.3% of the roughly 17,000 dealerships in the U.S., an all-time high, according to 2024 research by Automotive News. Further, the top 150 dealership groups together represented 24.1% of the industry’s total 2023 retail sales, up nearly a percentage point from 2022. 

Merger and acquisition activity slowed in 2024 after an active period in 2022 to 2023. Some of the large acquirers shifted their focus internally, ensuring they have the right labor pool, processes and expense structures in place, as sales and margins normalize. But demand is still strong, especially for the right franchises in attractive growth markets. Even still, there is ample room for consolidation. The dealership space remains vast and fragmented. Per the National Automobile Dealers Association, 91 percent of dealers still own between one and five locations, and this range is proving very attractive to investors.