The Canadian retail auto market is facing strong headwinds, including high interest rates, excess inventory and global political tensions. What does this portend for the buy-sell market? Here, Samir Akhavan, Co-Founder and Managing Partner of Templeton Marsh Ltd.
Excess inventory is the first sign that the market is turning negatively. Consumer incentives provided by the manufacturers would also indicate that to move inventory, the pricing option for consumers has to be more attractive. A: Yes, we believe the consolidation trend absolutely will continue to accelerate in 2024. The “easy” business conditions that have existed since shortly after COVID are over. In many cases, there is excessive inventory and dealer profitability is on its way down.
Q: Does this uncertainty favor acquisitions south of the border? Or, conversely, would Canadian dealerships be more attractive to suitors in the United States? Q: The pandemic and the Great Recession of 2008-09 represent the last two periods of true industry upheaval. What lessons from those times would help make us wiser participants in today’s buy-sell market?