Notable Results for Specific Franchises in The 2021 Kerrigan Dealer Survey:
Toyota & Lexus – This year’s survey results highlighted the value of the Toyota franchise with the majority of respondents expecting the franchise to increase in value (55%), the highest of any franchise. This is consistent with Kerrigan Advisors’ Blue Sky Report where Toyota has the highest blue sky multiple in the non-luxury segment. As the industry enters a period of evolution over the next decade, dealers are confident in Toyota’s future franchise value due to its continued emphasis on a supportive partnership with its dealer network. Lexus was also ranked highest amongst the luxury franchises with 43% of surveyed dealers projecting an increase in value, just below the top 5 franchises at #6.
Hyundai & Kia – Perhaps the most notable change in this year’s survey was the impressive improvement of Hyundai and Kia, which saw over a 23-percentage point increase in the number of dealers who project the franchises will increase in value, as well as a 16-percentage point decrease in the number of dealers who expect the franchises to decline in value. With these improvements, Hyundai and Kia become the second and third highest ranked franchises by dealers in terms of expectations for increased valuation, leapfrogging Subaru, Porsche, Honda, Mercedes-Benz and Lexus. These results are consistent with Kerrigan Advisors’ positive outlook for these franchises’ blue sky multiples in our Blue Sky Report.
Ford – Ford improved 17-percentage points in the number of dealers who expect the franchise to increase in value. Kerrigan Advisors believes the leadership of Jim Farley coupled with the improved profit outlook for the company relative to its domestic competitors is a contributing factor to the rise. That said, 15% of dealers surveyed still expect the franchise to decline in value over the next 12 months. These dealers could be the higher volume Ford dealers who are negatively impacted by Ford’s online order system which appears to disproportionately benefit smaller dealers.