As the auto retail industry navigates 2025, high-profile acquisitions—such as Asbury Automotive Group’s $1.3 billion purchase of Herb Chambers—have drawn attention to the buy-sell market. With valuations shifting and macroeconomic uncertainties looming, many dealers are considering their next moves. Willie Beck, co-managing partner of Bel Air Partners, joins CBT Now to provide insights into current trends, market expectations, and what’s driving dealership transactions this year.
The buy-sell market remains active in 2025, with major deals, like Asbury’s acquisition of Herb Chambers, setting the tone for ongoing consolidation in the industry. Beck notes that billion-dollar transactions are becoming more common, estimating that 20 to 25 dealer groups could command similarly high valuations. Recent deals, such as Koons in Virginia and South Motors in Florida, further illustrate the scale of transactions taking place.
However, Beck emphasizes that not every dealer is a seller. While high-profile acquisitions spark interest, many groups continue to expand rather than exit the business. Buyers with strong balance sheets remain in the market, but sellers’ expectations have shifted. Deal valuations are moderating due to lower earnings, with public retailer profits down between 11% and 24% year-over-year. Price remains a critical factor in negotiations, and while some sellers are opportunistic, many are motivated by lifestyle changes or succession challenges.Economic factors, including interest rates, expiring tax cuts, and the uncertainty surrounding tariffs on Mexico and Canada, are influencing dealer sentiment. While tariffs have yet to make a significant impact, Beck highlights that market stability is essential for long-term decision-making. Some aging dealer principals, with an average age of around 70, are re-evaluating their future in light of economic uncertainties, choosing to sell before potential tax policy changes take effect.
Despite fluctuations in activity levels, Beck remains optimistic about the buy-sell market, citing a steady flow of motivated sellers and continued interest from buyers. Bel Air Partners is expanding its reach, adding new team members to support clients in key markets like Detroit. For dealers considering a sale, Beck advises preparation—ensuring financial records and property details are in order before taking a store to market.
"We're in the process of digesting the earnings reports for the public retailers. It looked like, on a year-over-year basis, they were down anywhere from 11% to 24% profitability. So, that might be a good proxy for the industry." – Willie Beck