OEM Poll Sees Industry Evolution

Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.

U.S. automakers see market pressures limiting sales in the near future but expect technology to help shore up profits. Still, most anticipate profits will keep normalizing to prepandemic levels, though not in absolute-dollar terms.

Kerrigan Advisors gathered the outlook in its fourth annual OEM survey, which polled more than 150 brand executives between December and June.

The survey by the sell-side buy-sell broker found most automakers believe industry consolidation will continue as most see dealership blue-sky values remaining strong – 21% even predict they’ll rise.

At the same time, a growing number of OEMs say they see automakers taking over customer sales entirely, up six percentage points to 14% as new direct-sales players enter the market, including Scout and Slate. That share is still below the 16% and 19% seen in 2023 and 2024, respectively, but heading back in that direction.

Nearly a third of automakers say they’ll expect more facility investments by their dealers in the next five years, also up six percentage points from 2025.

“Kerigan Advisors sees these image investment requirements prompting dealers to reassess their capital allocation,” the report indicates. “In a growing number of cases, dealers are choosing to divest dealerships whose facility investments yield a low or negative return, making rising facility expenses a meaningful driver of dealers' decisions to sell.”

When it comes to profits, trade tariffs are a major factor, the survey found, and OEMs expecting a new-vehicle sales decline in the next 12 months rose five percentage points to 23%.

Nearly 60% of poll respondents said the automaker will absorb most tariff costs, but almost 40% said the majority will be passed onto the consumer. Still, even those who take the hit will likely reduce consumer incentives, Kerrigan predicted, thereby softening sales.

Other drags on demand will be overall consumer affordability declines and softened electric-vehicle sales after last year’s end of a federal tax break, Kerrigan said.

A new market player, though, is expected to help bridge the gap for automakers and their dealers, the poll found: artificial intelligence. About 60% of respondents see it padding dealership profits.

Kerrigan’s 2025 dealer survey showed that 90% of dealerships were already employing AI in their operations or planned to, and the firm predicts the tech tool will cut selling expenses, increasing revenue per employee.