Presidio’s latest quarterly publication highlights an improving operating environment and an uptick in M&A activity after a slow start to 2025

DENVER/ATLANTA — Aug. 12, 2025 — The Presidio Group’s latest issue of Presidio Perspectives: A Quarterly Outlook on Auto Retail and M&A Trends highlights growing dealership M&A activity, improving dealership profitability, stabilizing new-vehicle performance and increased dealer optimism around future results. The publication also explores how shifts in tariff and electric vehicle policies are affecting dealers and looks at the industry’s vehicle affordability evolution.

Presidio reported that the pace of dealership buy-sell transactions picked up in the second quarter after a slow first quarter that stemmed from a slowdown in dealmaking ahead of last year’s presidential election. Presidio estimated first-half 2025 activity at 208 transactions involving 285 stores. That would be the same transaction count as first-half 2024, though the number of stores involved would be down from the 326 involved in last year’s first half deals. 

“We continue to operate in a seller’s market, with active buyers widely outnumbering the volume of opportunities,” said George Karolis, president of The Presidio Group. “We are seeing more of a flight to quality with buyers targeting top brands in large metro markets.”

Presidio also updated its 2024 transaction tally to 418 deals involving 595 stores as news of additional closings emerged. That puts 2024’s current transaction total 8.9% higher than 2023’s, with 2.2% more stores trading hands. 

The Presidio report also includes the Presidio-NCM Average Dealership Performance Benchmark data for the second quarter and the results of the Presidio Midyear 2025 Dealer Direction Survey, both of which point toward growing stabilization of dealership profitability. 

The Presidio-NCM findings, as well as second-quarter results from the six publicly traded dealership groups, showed a stabilizing new-vehicle business, which provides a platform for gains in other business lines: used vehicles, finance and insurance and parts and service. Overall dealership profitability continued to improve during the period, driving the Presidio-NCM Average Dealership Profitability Index to 200, surpassing its mark of 180 in the first quarter of 2025 and 173 at the end of 2024.  This indicates the average store profit is now 2.0 times 2019 pre-pandemic levels. 

The Dealer Direction Survey highlighted a steady or improving operating environment with 72% of respondents expecting dealership profitability to remain the same or increase over the next 12 months.

“Dealers are demonstrating their ability to drive earnings growth through their higher-margin business lines,” Karolis said. “This new level of equilibrium is driving positivity in the M&A market.” 

Among other highlights in the report:

  • Toyota, Lexus and top German luxury makes continue to lead Presidio’s valuation guide. Presidio, however, is reducing blue-sky multiples for Porsche and Audi, with their exposure to tariff hikes a key factor in the brands’ new multiples. This tariff lens largely led to a better view of leading domestic brands but more caution around certain European luxury brands. 
  • The report’s Data Digest section explores the evolution of U.S. tariff policy and battery electric vehicle subsidies. Pricing and margin dynamics of future quarters likely will be firmer and more stable, though higher transaction prices could mute total vehicle demand, forcing dealerships to remain vigilant on aligning their costs to sales and service volumes.
  • The Auto Retail Technology Snapshot uncovers how technology, especially artificial intelligence and agentic workflows, will reshape dealership operations and the customer experience in “orders of magnitude” greater than ever before, according to Cox Automotive’s Marianne Johnson. Every role in the dealership is likely to be affected.
  • Presidio Director of Research Kevin Tynan documents how automakers have spent two-plus decades adjusting their U.S. product mix to maximize profits at the expense of affordable and high-volume new vehicles. With this strategy showing no sign of reversing, some dealers have diversified their brand portfolio mix and gained more entry-level vehicles to offer consumers.
  • The report’s disruption section looks at how the federal government’s rapid pivot on U.S. electric vehicle policy is creating waves, including product and technology delays, that retailers will have to manage over the coming months and years. 

To read the full report and register for future publications, go to: https://thepresidiogroup.com/news-insights/#quarterly-report

About The Presidio Group LLC

The Presidio Group was founded in 1998 with the simple mission to relentlessly put the interests of our clients first. By steadfastly adhering to this philosophy, the firm has earned the trust of clients throughout the United States. During their careers, the professionals at Presidio have collectively closed more than 290 transactions for over $19 billion. The Presidio Group, based in Denver and Atlanta, publishes Presidio Perspectives: A Quarterly Outlook on Auto Retail and M&A Trends, a leading source of information about the automotive retail landscape. Presidio Merchant Partners LLC is a subsidiary of The Presidio Group LLC and is a member of FINRA and SIPC. For more information on Presidio, visit www.thepresidiogroup.com.

Contacts

George Karolis
(678) 831-5520
gkarolis@thepresidiogroup.com

Lauren Pfohl
(404) 434-1837
lpfohl@thepresidiogroup.com