Automaker executives expect Chinese carmakers to enter US. market, Kerrigan Advisors survey finds

Most automaker executives who participated in Kerrigan Advisors’ 2025 OEM Survey said they think Chinese carmakers eventually will enter the U.S. market. And 70 percent of respondents also said they are concerned about the financial implications of Chinese automakers’ rising global market share.

Kerrigan Advisors’ annual automaker survey, in its third year, collected responses from more than 100 U.S. automaker executives from December through March, mostly before the Trump administration announced auto tariffs. The survey also asked participants about electric vehicle sales, dealer profitability and the franchise system.

Erin Kerrigan, managing director of Kerrigan Advisors, a dealership sell-side firm in Incline Village, Nev., said the questions about Chinese automakers were added to this year’s survey given their growing dominance globally and in their home market.

“These are considered real threats by the OEMs,” Kerrigan said.

Another new question on this year’s survey found a third of automaker executives expect to have fewer dealers in their network in the next five years; just 14 percent expect to have more. And in another new question, 28 percent said they will exercise a right of first refusal — a tool that allows an automaker to refuse a potential store buyer and replace them with a buyer of their choice — more than a quarter of the time in the buy-sell deals they receive.

China concerns

New questions added to Kerrigan Advisors’ annual survey of automaker executives reveal most respondents see the rise of Chinese carmakers as a threat.

“It’s certainly consistent with what we have observed in the buy-sell market and in our conversations with OEMs where certain OEMs are vocally saying ‘We want fewer, larger dealers,’” Kerrigan said. “As we see it, the OEMs are retreating from the idea that they will be the direct-to-consumer seller.”

The number of auto executives who believe an agency model — used by some brands now in the U.K. where the retailer is the customer’s contact point — will be implemented in the U.S. in the next five years dropped to 8 percent from 12 percent in last year’s survey and 22 percent in the 2023 survey.

Compared with the last two surveys, a greater number of respondents this year, 74 percent, said the dealer and automaker together will own the primary customer relationship and most customer data in five years. In 2024, that number was 67 percent and it was 66 percent in 2023.

Participants were also asked about dealership blue sky values, the intangible value of a store including goodwill. Seventy-eight percent of auto executives surveyed expect blue sky values to remain flat or increase this year. That compares to 68 percent of dealers who said such values would remain flat or increase this year in Kerrigan Advisors’ dealer survey released in January.

“What’s very interesting to me is that effectively, the OEMs were more positive than the dealers on their profit expectations for the dealer and the valuation expectations for the dealerships,” Kerrigan said. “If you think of it from a tariff standpoint, the dealer is probably in the best spot of anyone.”

Sixty-six percent of respondents said they expect dealership profits to increase this year, also a higher number than the 57 percent who said that in Kerrigan’s dealer survey.

The survey also showed most automakers plan to keep their facility requirements at current levels or increase them.

“Last year, 22 percent said we’ll probably reduce the amount that we’re asking dealers,” Kerrigan said. “Now 8 percent say that. And 25 percent expect an increase and 67 percent think it will stay at the same level, which is not small.”

Kerrigan said those significant capital investments for facility requirements are “too big of a financial risk for some,” noting many of her clients decided to sell because of them or because of how close they were to retirement.