Dealership values are being reshaped by a mix of pressures that go well beyond any single quarter's results. Profitability is normalizing, franchise winners and losers are diverging further, real estate costs are eating into blue sky, and a new question mark, Chinese automakers, is entering the conversation for the first time.

In DealersEdge's webinar, Alan Haig, President of Haig Partners, walked through current buy-sell activity and the market forces driving dealership values today. Drawing on Haig Partners' own transaction data, the discussion covered dealership profitability, which franchises are gaining or losing value, the potential impact of Chinese OEMs entering the U.S. market, and where buyers should be focused heading into the back half of 2026.

Key Topics and Highlights From the Discussion

Dealership Profitability in 2026

• Front end gross profit on new vehicles has held steady at roughly $2,900 per unit.
• Used vehicle margins have compressed to about 5.7%, down from a historical 6.5%, as competition from independents and online retailers intensifies.
• F&I profits remain tied to vehicle transaction prices and have held in the $2,500 to $2,600 range.
• Fixed operations growth, a major profit driver for the last several years, slowed to just 3.6% in Q1 2026, roughly in line with inflation.
• Trailing twelve month profit per dealership sits near $4 million, down from pandemic peaks near $7 million but still up 90% versus 2019 (63% adjusted for inflation).

Buy-Sell Market Trends

• Transaction volume is up approximately 50% year to date compared to this time last year.
• The elimination of California's CARB emissions authority (and similar rules in other adopting states) has removed a major risk factor for dealers in those markets, lifting blue sky values there.
• Buyers have become more selective, focused on acquiring the right brand in the right market rather than opportunistic expansion.
• Blue sky values remain historically strong, up 112% versus pre-pandemic levels (85% on an inflation-adjusted basis), though they have pulled back somewhat from pandemic-era peaks.
• Rising real estate and facility renovation costs are increasingly competing with blue sky value, with rent as a percentage of gross profit climbing from roughly 5% during the pandemic to 8-15% today in some cases.

What's Selling Well, and What Isn't

• Single-point stores in leading franchises, Toyota, Mercedes, Honda, and Subaru among them, continue to draw heavy buyer interest.
• Sun Belt markets, from Arizona and Nevada through the Carolinas and Virginia, are seeing elevated buyer demand and multiples above the national average.
• Smaller Porsche stores facing costly facility upgrade requirements, along with Audi locations, have been harder to sell.
• Even strong-performing Nissan and Stellantis stores can be difficult to sell at a premium when the broader franchise network includes many distressed or money-losing locations, since buyers can often find a comparable brand at a much lower price elsewhere.

The Question of Chinese OEMs

• Historically, new entrants to the U.S. market, European brands in the 1950s, Japanese brands in subsequent decades, and Korean brands after that, ultimately expanded the overall market and benefited retailers.
• Chinese automakers may present a different dynamic: many have received substantial government subsidies, are export-dependent given domestic overcapacity, and have prompted proposed federal legislation addressing supply chain and national security concerns.
• A dealer group in Australia, a market with a similar franchise structure to the U.S., reported that Chinese brand entry ultimately hurt traditional franchise profitability and blue sky values as market share shifted away from established brands.
• It remains unclear how Chinese OEMs might enter the U.S. market, through traditional franchise networks, as an adjunct to existing dealers, or through a direct-to-consumer model.

Franchise Winners and Losers

• Stellantis and Nissan stores are trading at a notably higher rate than their share of total U.S. dealerships would suggest, an indication that more owners are choosing to exit these franchises.
• Buick GMC stores are trading well below their expected rate, suggesting owners increasingly want to hold onto these locations as profitability improves.
• Brands viewed as "blue chip" investments include Toyota/Lexus, BMW, and Mercedes.
• Honda, Kia, and Mazda were highlighted as potentially undervalued opportunities with strong fundamentals relative to their current multiples.
• Nissan, Stellantis, and Audi were identified as higher risk, higher potential reward opportunities for buyers willing to bet on a turnaround.

Persistent macroeconomic headwinds, including elevated interest rates, softer consumer confidence, and ongoing trade policy uncertainty, are expected to keep dealership performance more challenged through the remainder of 2026 than in recent years. Even so, current data shows no significant erosion in blue sky values so far this year, and 2026 transaction volume is on pace to reach 550 to 600 dealership sales, continuing the strong pace set in 2025.

Watch the full conversation here to hear Alan Haig break down the data, trends, and strategic implications shaping dealership values heading into the second half of 2026.

Download the presentation to review the charts and data shared during the webinar.