"It Could Be a Record Year!" Inside Auto Retail's Biggest Buy/Sell Year Yet & What Top Operators Know | George Karolis, President at The Presidio Group
Car Dealership Guy Podcast
"It Could Be a Record Year!" Inside Auto Retail's Biggest Buy/Sell Year Yet & What Top Operators Know | George Karolis, President at The Presidio GroupCar Dealership Guy Podcast · Jul 23, 2026
This means car brands sell cars straight to customers instead of going through local dealerships. The point being made is that this approach in China is pressuring other parts of the industry and making some people think about leaving the dealer business.
The Toyota Corolla is a regular, everyday car that’s meant for commuting and daily errands. It’s popular because it’s easy to live with and is commonly sold in many places. That’s why it often shows up in dealership conversations.
Topic
buy sales, M&A industry at large
They’re about to talk about buying and selling dealerships and other big business deals in the auto industry. “M&A” just means companies merging together or being bought.
The Presidio Group is the organization behind the annual invite-only retail dealer event discussed in this segment. The host references “Presidio annual event” and describes it as bringing together major dealers and technology companies.
Charlotte Motor Speedway is a famous race track in North Carolina. In this episode, it’s mentioned because the event was held at a private club connected to that area.
Term
998
“998” here is just a number of cars sold—nearly a thousand units—from a specific store location. The host is using it to show how much volume the retailer is doing.
Term
disentry
The word sounds like it means “cutting out the middle.” In car buying, that would mean reducing the traditional dealership step and letting customers buy more directly using online tools.
A frictionless process means the buying experience is designed to feel easy and fast, with fewer annoying steps. The host is saying their system makes it simpler for customers to get what they want.
Gross profit is the profit left after you pay the direct costs of getting and selling the product. Here, the host is saying dealerships split that profit across people and expenses, which affects how much is left.
The traditional dealer model is the normal way car dealerships operate, with salespeople and other staff involved in the sale. The host is comparing that to newer ways of selling cars that may have lower staffing and overhead.
Carvana is a car-selling company that focuses on buying and selling cars online. The point here is that they can sell a lot of cars without the traditional dealership setup and costs.
In dealership terms, efficiency means doing the same work with less wasted time or money. The idea is that cutting unnecessary costs can help the dealership make more profit.
“Bottom line” just means how much money a business actually keeps after paying its bills. If costs go down, the bottom line can improve.
Term
EV thing
They’re comparing this situation to what happened with electric cars. When EV buyers wanted a smoother, easier buying experience, companies that streamlined their process did better.
AI just means “smart computer software.” It can look at lots of information and help make decisions faster—like figuring out which customers are most likely to buy a car.
The “COVID rush” describes the unusual market surge during the COVID-era period when demand and buying behavior shifted rapidly. The host contrasts that time—where buyers chased almost any deal—with the current market’s different mix of buyer interests and seller supply.
A “bifurcated market” means the market splits into two different segments with different buyer preferences and behavior. In this segment, the host says interest is split compared with the COVID rush, when buyers were more broadly chasing “anything” that could be sold.
“Dealer body” just means the whole group of dealership owners in the industry. If many are getting older and don’t have someone to take over, more of them decide to sell.
Succession means having a plan for who will run the dealership next. If there isn’t a plan, owners are more likely to sell instead of keeping the business going.
This is about electric cars being sold used, not new. Dealers can’t always treat them like regular gas cars because buyers and prices can work differently.
Portfolio management here means treating dealership locations like a “bundle” you manage together. Instead of just running one store, you decide which stores to add, sell, or keep.
Concept
dealer portfolio
A dealer portfolio is just the collection of car dealerships a company owns. The conversation is about how those collections are being reshuffled through buying and selling.
An Audi Coupe is a two-door car from Audi that’s designed to look sporty and feel more engaging to drive. It’s the kind of car someone might choose if they want a more stylish, performance-focused body style. In a dealership setting, it can be a different kind of product than a typical four-door car.
“Stellanus” sounds like they meant Stellantis, a big car company that owns multiple brands. They’re talking about dealership deals involving that company.
Nissan is a major Japanese car brand. They’re saying Nissan dealerships are seeing more deal activity and improving sentiment compared with some other brands.
In a car dealership, “fixed operations” means the money the store makes from things like servicing cars and selling parts. It’s usually more steady than selling new cars, because cars still need repairs and maintenance even when sales are slow.
A “video MPI” is an inspection where the dealership uses video to show a car’s condition in several spots. Instead of just telling you what’s wrong, they can show you on camera, which helps you understand the recommendations.
An “upsell process” is the dealership’s structured approach to recommending additional services or higher-value options beyond the customer’s original request. In service, it often relies on inspection findings to propose recommended maintenance or repairs.
“Variable” here is basically saying things changed from 2020 to 2025—innovation wasn’t the same all the time. It’s pointing to shifting priorities in how dealerships try new ideas.
Porsche is a famous German sports-car brand. This segment is about how Porsche’s dealer situation and limited supply can make some dealerships do well while others struggle.
“Margins” are the profit dealers make on each sale. If Porsche “cut margins,” it likely means dealers have less profit per car, which can hurt stores that don’t sell many units.
Facility requirements are the standards a dealership has to meet to sell a brand. If those requirements are expensive or demanding, smaller dealers can be at a disadvantage.
Mercedes-Benz is another premium car brand. The host is comparing how much demand they’re seeing versus Porsche.
Term
UIO
UIO is a dealership metric that roughly tracks how many vehicles/units the store has working for it. The host is saying smaller Porsche dealers have fewer units available, which makes it harder to keep up.
GM is General Motors, the big company that owns brands like Chevy and GMC. They’re saying GM dealers are feeling more positive because people want certain GM vehicles.
A “multiple” is a valuation yardstick—basically a number that tells you how much buyers are willing to pay based on the dealership’s results. If the multiple goes up, it usually means the dealership is worth more than before.
“Toyota stores” just means Toyota dealerships. People use it when talking about how well each dealership sells cars and what the dealership business is worth.
This phrase means whether there are more buyers than available cars/dealerships, or vice versa. If it’s “in favor of sellers,” it means sellers have the advantage.
In dealership talk, “throughput” means how much business a dealership produces—typically sales volume per store over a period. When the host says Toyota has the “highest throughput,” they’re arguing Toyota dealers sell more cars (or generate more revenue) per dealer than other brands.
“Luxury per dealer” means how much money or sales luxury dealerships average per dealership. The host is saying Toyota dealers are doing that well too.
A “non-core market” is a place where a dealership group doesn’t want to concentrate its main efforts. They may sell or exit those areas to focus on stronger regions.
A “moat” is a metaphor for something that helps a business stay ahead of competitors. Here, it means the dealership group has advantages that make it harder for others to take customers.
Asbury is a company that owns and runs car dealerships. In this segment, it’s used as an example of a dealership group selling some locations and changing where it operates.
A “dealer plate” is a special plate that lets a dealership legally drive and use certain cars for business purposes. The speaker is saying some groups keep a store just to keep access to that setup.
A “demo” is a car the dealership uses to show customers and let them test drive. The speaker is saying dealers may keep a location so they can keep that demo car.
The 80-20 rule means you get most of the results from a smaller set of things. In dealership terms, it’s about putting most effort into the locations or fixes that matter most.
An “M&A report” is a summary of buying and selling companies. In this context, it’s about dealership deals and what prices and trends operators are seeing.
Term
EV mandates expiration
“EV mandates expiration” refers to the end of a regulatory requirement timeline related to electric-vehicle obligations. In retail terms, it can affect demand, inventory planning, and how dealers manage profitability during the transition period.
A “three-year outlook” is a plan for what the business expects to happen over the next few years. It helps dealers decide how to run the store and manage costs.
“FNI” usually means the money a dealership makes from financing and insurance. Even if vehicle sales are slower, strong finance/insurance sales can help dealers’ profits.
A “pipeline” is a list of deals that are currently being worked on. It’s a way to estimate how much business is likely to happen soon.
Brand
CDG
“CDG” is a named source they use to track dealership deals. It’s mentioned as where you can see announcements and reporting.
LIVE
The pressure on profits, the headwinds, the geopolitical tensions, a lot of the potential
risks in the future.
We have China direct sales model is causing more folks to, you know, consider an exit.
George Corolla is back on the CDG podcast.
George, welcome.
Thanks, buddy.
Good to be here.
This time we got you nice and tan in South Florida.
Before we get into buy sales, M&A industry at large, you always have, you always had
some interesting event.
Every time I talk to you, you're doing something.
What have you been up to lately?
What's the last event you were out to or who did you see, I'm curious?
We had our annual retail dealer event just about a month and a half ago.
The Presidio annual.
Presidio annual event.
Invite only.
It's most of the biggest dealers in the country and a lot of great tech companies, but it
was at...
We honored Mr. Hendrick this year, Rick Hendrick.
It was an amazing couple of days.
We had it at his private 1010s club off the Charlotte motor speedway there.
He opened his home up for us.
We honored him at the end of the day with a Fireside Chat and an award, a Presidio Lifetime
Achievement Award.
But we kicked the day off with Jay Leno, who was hilarious, incredible, and he's a car
guy.
How is Jay?
Very cool.
Jay is doing a couple hundred events a year still, loving what he's doing.
He was casual, fun, and funny, so it was a lot of fun.
But in between, we had folks like Ernie Garcia, Jeff Rocker from Berkshire, Adam Chamberlain,
CEO of Mercedes and good friend of mine, Matt Leone from DriveCentric, and many, many more.
So it was an amazing day.
It's our way of giving back to the dealers in the country and providing cutting-edge
hot topics and information where they can get together, talk with each other, and hear
from industry leaders about what's going on and what to think about.
So amazing.
So what's an incentive for someone like Ernie Garcia to be at an event and share information?
Why does he do that?
Well, you know, he doesn't do many of them.
He doesn't.
This is the third time he's done one of our events.
I think he trusts our event that it's bespoke and private, and we have, again, some of the
best industry leaders there.
This year, more interesting than in the past because he owns a new car source now, so it's
a little more relevant for him.
Tried to get him to fess up on what he's really doing, but he's pretty buttoned up and tight
lip, but he was great and a lot of fun to listen to, but didn't really tell us much
versus what you hear publicly.
But he is a phenomenal person and speaker.
He's built a great company and he's got some cool things going on right now that people
need to be paying attention to.
What do you think about what they're doing?
I mean, I've seen everywhere the number, 998.
They sold 998 units out of the Arizona store, and that's kind of been all over the web.
What's your take on this?
They seem to be accelerating their disentry in the new car world very quickly.
That's right.
This is my personal opinion.
No information, nothing special that I've learned, but they keep saying they're testing
things and this is not a test in my opinion.
They have proven that they know what they're doing on the new vehicle side.
You just said it, how many vehicles they sold in one month out of a store that wouldn't
sell in many vehicles.
They're doing it with tremendous technology that they've been building for years, frictionless
process that the customer wants.
They don't have sales associates, they don't have a lot of the excess costs that dealers
have to go through the process.
They're giving customers what they want without even seeing a vehicle in a great process,
and so dealers need to take note of that.
We talked about it last time we were together, but when you look at the traditional dealer
model, north of 40% of total gross profit is paid out to people.
That's excluding technicians, which are through gross profit.
Close to half of every dollar in gross profit generation is paid, and Carvana is doing a
lot less than that.
Sub-20, and their last filing I think we saw, I don't remember the exact number, so they're
much more efficient.
That's an opportunity for dealers that are paying attention and that are evolving with
technology and AI and efficiency.
If you could become more efficient and optimize your expenses, and in some cases on the personnel
side, that drops right to the bottom line.
I get there's a delta there.
One could argue that it's all just being transferred to their fixed expenses anyways, and their
fixed expenses are much, much greater.
Of course, it's supposed to outweigh that over time.
That's the whole point of a venture.
What's your take on they're selling a high proportion of these vehicles outside of the
PMA?
How do you think this actually shakes out?
Pumbouts are interesting.
Some OEMs that just want to move metal and volume, and so they're doing that with some
of these stores, but that could become an issue with certain OEMs that have tighter inventory
and a really stricter standards in terms of pump-ins and pump-pounds and selling into
your market.
In the main, it's all about what the customer wants, and it's kind of like the EV thing
from a few years ago.
Customer wants an efficient, quick, smooth, frictionless process.
Carvan is providing it.
There's some dealers that can do that and that are doing it well and some that are trying
to do it.
I think that's what it comes down to.
I think it's an opportunity for dealers, ultimately, that we're in a gold rush of technology
in particular AI.
Obviously, you can't have a conversation without talking about AI.
It's kind of getting to the point, right?
But it's real, right?
AI's here.
Not all AI is made equal, but it is helping very rapidly.
Talk to me about Q1 had a record in buy sales.
It seems like the first half of this year, in general, Pace has really picked up.
Generally speaking, we're things standing right now today as we're recording this.
It could be a record year, or if not, it will be a record year in buy sales.
It'll likely be at least the second best year, but right now we're pacing to be equal to,
if not better than, or close to the record.
And how are we outperforming the COVID rush?
How is that possible?
Well, the COVID rush led to a lot of capital and a lot of new buyers, right?
Correct.
It's a different market, right?
So there's a sort of bifurcated mark in terms of what folks are interested in versus the
COVID rush, which was most were chasing anything, and any deal could get sold back then.
So it's a lot different today than it was then, but there's more sellers today.
And we saw that with some of our survey results, which we could talk about here shortly.
But the first quarter of 2025 was really soft, right?
Because of the election in late 24, that slowed down deal activity, there are a lot of folks
on the sideline waiting to see what would happen.
And so that's why we saw an accelerated heightened pace in the first quarter of 2026.
The second quarter was pretty on par with the second quarter last year, which was a strong
second quarter.
So that slow demand in the first quarter of last year picked up in Q2 of 2025, and we're
seeing a similar pace, but there's about a 50 deal or so difference between the first
half of this year versus last year in terms of acceleration.
50 more transactions, roughly.
We're estimating about 215 total deals halfway through the year for about 315 or so dealerships
that change hands.
That'll move around as deals are reported, but that's our best assessment at this point,
which we've reported on actually last week in our M&A report that we just issued.
But it's a different market.
We talked about last time we were together, had buyers are being a lot more diligent.
There's a flight to quality, not all brands are created equal, so we're seeing a lot more
focus on the top brands and the top markets than we have in the past, whereas, again,
at the height of COVID, anyone would buy anything.
One thing I noted you were saying, do you think there's a lot more sellers?
What's driving more sellers?
Is it distress, portfolio management, combination, why do we have more sellers today?
You still have the no pun intended age-old phenomenon of the average age of the dealer
body, which is north of 70, right?
Which is that's the expected sellers.
That's the expected sellers, and the life expectancy, I don't want to be morbid here,
but is not terribly far away from the average age.
We see an aging dealer body, and when there's a lack of succession, that drives a lot of
deals.
But I think the pressure on profits, the headwinds, the geopolitical tensions, a lot of the potential
risks in the future.
We have China direct sales model, a lot of things happening here that are front and
center, that are pressuring the model, is causing more folks to consider an exit.
Those that don't have succession, those that are thinking about selling one day, right?
A few years ago, we had dealers just say, hey, one more month, because
everything was great.
Well, now, you have to work a little harder to make a little less, and so I think we're
seeing that come through in our survey, which was released a few weeks ago, that represents
over 4,000 dealerships, 18% of survey takers said they're interested in selling in the
next 12 months, which is up from 11%.
And so that's nearly double the number of respondents.
Now, most of those come from the category of mutual...
The dealers are efficient.
They probably think the lemon's been squeezed, time to move on.
And I think a lot of those sellers represent the less desirable brands, because we're seeing
that, we're seeing a lot more deals for the tougher brands as well.
Most of our deals year to date have been on the luxury side, which is in high demand.
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Okay, so how do you reconcile that?
Well, I guess you're seeing more supply on the tougher deals and more mainstream brands,
but your actual completed deals are on the luxury side?
Yeah, we've done 10 deals a year to date, which 25 total stores, but 17 of them were
luxury.
Wow.
Interestingly, all but one of those were portfolio management.
So it was top, the largest groups, the top 150 groups, and several publics actually selling
luxury store portfolio management, which we talk about a lot.
Yeah.
But we're seeing those same groups then redeploy into other assets, luxury stores.
So they're redeploying.
So they're redeploying.
So there's a whole, there's just a cadence of a portfolio management, whether it be
the wrong market, they're in the wrong market, or they don't have scale, or they're trying
to diversify their brand mix.
There are a whole host of reasons why folks sell stores that are ultimately net growers.
But we see a majority of our business being on the portfolio management side, representing
some of the largest.
Most of the public companies, a lot of the biggest private groups in the country.
In terms of portfolio management, what brands are you seeing?
Are you seeing anything disproportionately represented here?
Is everyone suddenly cold on Porsche?
What's the Audi?
Not necessarily.
It's smirking.
Well, we did sell a couple Porsche stores and a couple Audi stores this year, but someone
bought them.
Yeah.
And so everyone has a different approach and a different sort of philosophy.
I don't think there's any one brand.
Now, there are a lot of, I'll say, less desirable brands on the market.
There's a steady flow of Stellanus and Nissan.
Nissan's ticking up a little bit in sentiment, but a steady flow of deals of that kind and
Volkswagen and Volvo and things like that.
Right.
So there's a lot of deals on the market.
Now, there's a lot of stores that have a lot more stores than their luxury counterparts.
But I don't, I mean, it's even, it's a good mix across where we tend to focus on higher
tier brands and representing larger companies.
And so our business is going to be skewed a little bit to that.
But I don't think that there's any one brand that's standing out.
Touching back on, you mentioned your survey with 4,200 rooftops.
Obviously, very statistically significant, meaningful survey.
I noticed that, correct me if I'm wrong here, but net profitability optimism amongst dealers
was at its worst for almost the last three years.
In essence, everyone is expecting net profits to, not everyone, but a much larger percentage
of dealers are expecting net profits to continue declining.
Do you have any trends amongst what brands these dealers are?
Or is it right?
Is it all deal?
I mean, if I'm a Lexus dealer, am I voting that way?
Or is it pretty much, you know, everyone else?
Like what's the, I'm trying to send the brand correlation.
I think the brand correlation does tie to our sentiment survey that we saw.
So the lower tier brands are performing less optimally than the higher tier brands in terms
of what dealers desire.
So no, Lexus stores are generally going to perform better than an infinity store, for
example, in the main.
Of course.
And so I think those things are highly correlated in multiples, valuations,
design and building.
So you're saying just look at the multiples and that gives you the picture.
That's right, but overall the industry is off this year.
2025 was a tremendous year with a lot of catalysts.
We don't need to rehash everything, but you had election exuberance.
You had tariff threats with creating pull forward.
You have EV mandates expiring.
So overall the year was up over 6% last year, but we saw the first and second
quarters of 2025 up nearly 30% combined.
Right.
And that's when most of the catalyst, you know, took hold.
And so we're seeing a softer year this year.
We've released today, second quarter data from NCM and at 2pm today, tune in to our
drive-in live podcast series with Jason Stein and Kevin Tyner where they're going
to be talking about those results.
Use the QR code here or go on our newly designed website to access our drive-in
live series where we're going to talk about the second quarter data first
released here with our partnership with NCM.
But in the main, the first half is off significantly from the first half of last
year because we had a really strong first half last year with all those catalysts
and we had an unexpected issue with the Iran conflict, rising costs, rising
fill prices and geopolitical uncertainty, putting a lot of consumers on the sidelines.
So we had a little perfect storm that impacted profitability for this year.
And so a majority of dealers in our survey said that they expect profitability
this year to be, you know, off from last year, a majority.
Now over a three-year outlook that flips and a majority actually believe that
it'll stay the same or go up over the next three years.
So most dealers are saying this is a temporary deal coming off again of a strong
2025 and with some headwinds that we hope will get passed.
You're saying there is some geopolitical impact, primarily impacting the consumer.
Or at least that's how dealers are underwriting deals that you're looking at.
I don't know about underwriting deals, but it's how they're talking about profitability.
But it's more short-term.
How correlated is the geopolitical impact, whether it be Iran or obviously
fuel prices, but how much do you see that really seeping into deals and valuations?
Well, we saw it seep into profitability, in particular starting in March, obviously.
And through the last few months.
Now we're hearing June is a strong month from a lot of dealers.
We saw a pretty strong SAR.
I think some of the outlets reported on a north 16 SAR.
And the year will probably finish below that.
But June was a strong month.
Now it's coming off a really strong comp again from last year.
And so it's all relative to what you're comparing it to.
Valuations, again, there's a bifurcation in the market.
We're actually seeing stronger valuations for the top most desired brands because of
the scarcity and the flight to quality.
So we're actually seeing stronger valuations and we're seeing a little more pressure on
the lower tier brands.
Do you believe that's a flight to quality?
Or is it major retailers simply betting that the future of this business is fewer brands?
And I say that because why didn't we have this flight to quality 10 years ago?
What's changed now?
Well, 10 years ago, it was a different environment so it was half the pace that we're running
at today.
But we did, right?
Because if you look at consolidation trends and statistics and data, over half of the
stores, half of the luxury stores in the country are owned by the top 150 groups.
They own about 26% of the total stores, but more than close to double that in terms of
luxury.
And the public's own 6% of the total stores, but over 20% of the total luxury stores.
So that didn't just happen the last few years.
That's been building for years.
Now, again, it's supply and demand.
There's 200-some-odd Lexus stores, 204 Porsche stores, 380-Soe, Mercedes stores, and a little
less than that on BMW, and north of 1,000 Toyota, Honda, Subaru stores, for example,
and then well north of 2,000, 3,000 on the domestic side.
So there are a lot fewer luxury stores.
They have much bigger territories, big fixed operations, UIO to pull from, so lots of customers.
Fixed is where the strong profit is, and all the focus is amongst dealers.
And so all that correlates to a focus, a heavy focus on luxury, especially in the best markets
by the biggest players out there.
And we're seeing that in our book of business, we're seeing that in terms of our daily conversations
with dealers, and we're seeing that trend play out.
Interesting.
So a combination of what, like a stickier customer, slightly better profits?
Well, a lot better profits.
Well, it depends on the brand.
Depends on the brand.
But if you take Lexus, Mercedes, BMW, in particular, which are the volume, you know,
unless you're a lot more disposable income.
That's right.
Well, they're more insulated, but you have a much bigger, you have less competition.
You have a fraction of the stores in the market.
True.
Then you do.
And again, it's fixed operations that is a big player.
Now, your margins on those vehicles are great.
Nothing happens anywhere in any dealership until you sell a vehicle.
But fixed sticks around.
Fixed is the sticky piece.
It's 80% of our respondents in our dealer survey said fix is the number one driver of
stability and profitability for them.
I have to imagine we're just going to keep seeing more investment go into fix.
Not that we haven't seen investment go into it, but man, like it's becoming more
important in this environment.
And, you know, I'm seeing just startups and different things coming up to make the, you
know, I think the big one right now, of course, is the video MPI with like Ray-Ban glasses
or trying to automate more of that aspect to get, you know, a more efficient technician,
a more thorough RO, upsell process, but just really fascinating stuff
happening on that side of the office, which, by the way, I saw a lot more focus on variable
from like 2020 to 2025 in terms of innovation.
So that's going to be interesting to watch.
I also want to touch on two things there.
So let's finish with luxury.
That'll go to mainstream.
What are dealers telling you right now behind closed doors on Porsche?
What is the deal with Porsche?
Porsche is a bifurcated market as well.
Look, there's 204, I think, Porsche dealers, so very few.
There's a lot of dealers that just want to own a Porsche store.
It's more of an emotion, trophy, emotional.
I think the average Porsche store sells somewhere around 376 units or so, that number six in my
head. And so that means there's a lot of dealers that sell less than that.
And there's some that sell more than that, right?
The average is average.
Porsche cut margins over the last year or so.
Their production is off.
Their facility requirements are significant.
They're a little tougher to deal with.
And so some dealers, especially the smaller ones, that don't get the allocation or
don't sell as many vehicles are under pressure.
Some of the larger dealers are faring well.
And so it's a tale of two dealers there.
Porsche is an iconic brand.
Again, I think there will always be demand.
It's valued right up there with Mercedes and BMW.
We actually see more demand from Mercedes and BMW.
But again, there's so few Porsche stores.
But it's definitely bifurcated.
You know, not all Porsche stores are created equal.
And if you're a smaller...
Which ones are outperforming?
You know, if you're a smaller Porsche store, it's tougher.
Less desirable?
If you don't have the...
You're not getting the inventory, it's harder.
You don't...
You have less fixed operations.
Less UIO.
Less to pull from.
The top larger volume Porsche stores are doing just fine.
Okay.
So now going mainstream.
I saw Chevy Rose in your dealer sentiment.
One of the only mainstream brands to rise, I think alongside Kia,
what's driving?
What do you see at Chevy?
Well, Chevy, a janitor, has done a great job.
They've waded through the EV noise much better.
They're producing vehicles that customers want.
The truck is obviously a great play for them in the U.S.
And so we're seeing a lot of positive demand sentiment amongst GM dealers.
Same for GMC.
GMC truck and the Yukon in particular are great vehicles.
Buick, they did a good job kind of with managing through Buick,
which isn't impacting dealers as much.
And it's not even a topic, right?
It's all about GMC.
And so Chevy and GMC, GM's done a pretty good job.
So we've actually taken multiples up for both of those brands.
Yeah.
Most recent report that we released last week.
We talked about Porsche, the slight change there in terms of sentiment,
but we're monitoring Porsche.
Audi's actually come down a little bit.
We've taken Audi down.
Audi dealers are under a little pressure.
The product is stale.
We saw some announcements from Volkswagen in the last few days
in terms of global production cuts across all their brands.
So we'll have to monitor that and see what happens there.
How do you think that impacts the U.S.?
If they have fewer models to sell, it will be less vehicles for dealers to sell.
Now, which ones?
We don't know yet.
We don't know what that is or what brands that have a lot of brands, right?
Very shaky.
And then the other thing that stood out,
I'm struggling to record Toyota, right?
Like you could make the Army its price to perfection,
and its multiple was raised again this quarter.
Well, two things can be true.
Yeah.
So the consumer or the buyer,
every buyer I talk to wants it.
Not every buyer, but most buyers want to own Toyota stores.
I'm a double Toyota Ford, baby.
There you go.
And we just rode in your Lexus.
Yeah, old Lexus Ford.
Lexus is a different beast.
We can talk about Lexus in a second.
But we're talking Toyota here.
Toyota stores, yeah, we raise them multiple.
In fact, they are trading like luxury stores,
like mainstream luxury stores, like BMW Mercedes.
They just are.
And so that is reality.
That's what Toyota stores are trading for.
And there's a significant demand and supply and balance
in favor of sellers.
They're a great brand, most highest throughput amongst any of the brands,
even luxury per dealer, even though they have over 1200 dealers,
still the highest throughput over 1700 per dealer.
They've done a great job with production and not overproducing.
So dealers are enjoying great margins.
They're an amazing partner.
And so for now, that's where the cadence is for Toyota amongst dealers,
buyers and sellers.
They do keep on winning.
In terms of opportunity and value, are you seeing any brand,
like any alpha in the brands right now, or is it all like deal by deal?
And I asked, for example, could make the argument that Nissan was at the trough a year ago.
And now, like you said, it's sentiment starting to rise,
and things are getting a little better.
So maybe that was a great time to buy in terms of just alpha.
What about today?
Are you seeing that anywhere, or Audi?
I mean, anywhere where you're seeing the light at the end of the tunnel,
where a potential out, because of course,
you can always find the deal by deal.
Any brand, you got at the right price, it's a deal.
But I'm curious if there's any brand alpha out there right now,
based on your knowledge.
I think, I mean, it's a great question.
Nissan, in particular, we saw jump five points to the positive
in our most recent dealer survey.
Now, we haven't changed valuations there yet, but we're watching it.
Some good leadership changes are listening to the dealers.
They have some product coming.
And so, we are hearing from a lot of dealers that they're
interested in potentially buying some Nissan stores.
Same thing with Salinas.
We're actually seeing some deals happen.
I know of a few deals with some of our clients,
where they're trying to buy Salinas stores.
Now, they're getting good deals on them.
But if I think about some of the brands that don't get talked about as much,
when we talk about alpha, Mazda comes to mind.
We talked about GMC a little bit, so that multiple go up.
The stable brands, Subaru Kia, for example,
Subaru had some really good sales numbers this month that were just announced.
But of course, Mercedes and BMW, Lexus Source trade above
at the highest of all luxury stores, and for a reason.
But we're seeing a lot of demand for Mercedes and BMW right now, as well.
So, I think it's sort of...
Adam's doing a good job at Mercedes.
Adam's doing an amazing job.
What a great leader.
He's doing great.
Now, he doesn't make the cars, but he's doing great.
He's listening to the dealers.
They're supporting their dealers.
It's an iconic brand.
Great car.
I drive Mercedes.
So, I think it is, though, deal-by-deal specific.
Every deal is unique and different.
We're seeing portfolio management lead the charge, but we're seeing
some of the top best groups interested in buying deals that others are interested in selling.
And for a reason, they might have a different platform or a different structure,
different dealership base in a certain area or a different focus on brands,
or a belief system on those brands than others do.
And so, there's not a cookie cutter story or answer.
Again, every deal is unique, and the beauty of the franchise system
and the franchise laws is that these are protected territories and assets
that, in the main, are supported pretty well with R&D and a lot of investment from the OEMs.
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I was watching this podcast recently with a very smart investor,
been very successful, and he was talking about how much of the public market
valuations is truly just driven by narrative story, like online sentiment, right?
It starts online and gets offline, but the point is like meme stocks?
Not even just meme stocks, but just in general sentiment narrative like drives everything,
right?
So, taking this back to auto, when you say portfolio management, how much of this is
really driven by, hey, we need to improve our margins to, hey, we're not bullish on the future
of this brand? If I was trying to read into that signal, what am I reading into?
With all these publicly traded retailers that are divesting of multiple brands,
if I'm in that boardroom, I'm flying the wall. Is it driven by profits? Hey, we need
higher to show better margins or is it that or what is it?
Well, it depends on the brand, right? So, some brands, there's some brands that I think
many of the biggest dealers wish they could get rid of all of them. I won't name which ones.
What letter does this start with?
Yeah, right. I'll refrain from that one. But if we take as an example, Fletcher Jones,
one of our amazing clients, top 20 group in the country, private group, great folks.
What they've done in the last couple of years, right, they've shifted,
they've sold, we just closed a couple of weeks ago on a Mercedes store for them.
In Northern California, we sold for them.
You sold for them.
In Northern California.
Okay.
In a non-core market of theirs. And in the last couple of months, they actually bought
a bigger Mercedes store, same brand in Southern California, Mercedes-Benz Beverly Hills,
which is an iconic brand, right? A kind of iconic store. And so, they have a moat,
they have huge scale in Southern Cal, they have the Newport store. So, they're realigning their
portfolio to where they have scale. And they have a lot of different reasons why they're doing
things, but they didn't just get rid of a store because it was a brand. They're realigned, but
they also bought another one of the same brand, right? And so, that's true portfolio management
right there, right? Getting out of a non-core market, but not selling brands, right? Still
maintaining status quo with your brands. And so, that's just one example. We're seeing the public's
selling some key assets and keep some top brands. We sold, gosh, 10 stores for Asbury in the first
quarter of this year. They actually exited a couple of markets. They exited St. Louis and most
that was luxury, but that's coming off the heels of the Herb Chamber Sale, a massive deal that
they did, and they added a lot of luxury amongst other stores. Some dealers, they want to diversify,
they want to exit partially, but they don't want to let go. We see sometimes where there's family
members that you keep a store for, so there's all different reasons. Keep the dealer plate.
Different reasons. Yeah, you want to keep your demo. You got to keep the demo. I got to keep a
store so I have a demo. It's amazing how many times a demo becomes a topic of conversation.
Unbelievable. These $100 million deals. It's unbelievable. I've witnessed all of that.
You've witnessed it, yeah. But I think that's one example, but the 80-20 rule and some of the
larger companies will have stores that they are putting 80% of their resources on trying to fix,
trying to address, and it's taken away from optimizing and growing more properly. And so,
we see companies selling for that reason, taking one step back to move two steps forward.
And so, there's all different reasons, but oftentimes, it's also too much of one brand
or too much in one market or too much kind of lack of diversity.
What's on your plate for the next couple of months? Any interesting events? What are you
getting into? Well, we have a lot of deals that we're in the market with, launching one in about a
week. And so, we have got a couple dozen deals that we're active on right now, so that's on our
plate. We're growing our team. Just added a couple of team members to sort of fuel and support that
demand. We have the buy-sell advisory team. We're up to 10 folks now on our team. We've got our
tech conference coming in October. What's that? So, we have a technology auto tech conference
in Denver every year in October, where we bring most of the tech leaders and a lot of the innovative
tech companies and a lot of dealers attended as well. It's a great event. So, we're gearing up for
that. Just really, our thought leadership is on fire right now. We're doing a ton of work.
Kevin Tynan, I don't even know actually how he is in seven places at once, but he is. He's speaking
to almost every state association and Jason Steins on the road, just speaking to dealers and hosting
events, some of the biggest events in the industry. You guys are active. We're active. We're publishing
a lot of information. Again, just released today, the second quarter private dealer results for over
4,000 dealerships on second quarter performance. Take a look at that. I heard it here first.
Our car dealership got a podcast. But take a look and tune into our 2pm podcast to discuss those
results. Put out our M&A report last week. We're putting these reports out quicker and in pieces
now. So, we launched our survey. So, our survey is one of the most timely surveys. So, it spans
about 30 days. And so, the sentiment changes rapidly. If we did this survey in the beginning
of the year, it wouldn't have taken into account the Iran conflict and what's really happening.
And so, it's so important that we have timely survey data. And so, we prod ourselves in that.
And it's a big lift, but the survey results are from literally the last 30 days before we released
and that came in a few weeks ago. And it covers over 4,000 dealerships. And so, it's statistically
valid, as you said. So, be careful what you read out there. Make sure you know what the
survey covers and how timely it is and how many, you know, dealers it covers. And then,
of course, our M&A report, we changed multiples twice a year. So, that just came out last week.
So, take a look at that. All of our information is now free. No wall up to access on our website.
Don't have to put your information. You can get any of our prior reports or our current reports
anytime on our website. And we just newly launched that website, newly designed website,
that is AI and geo-friendly. But, you know, I've no more do you have to put your information in.
So, we decided to just make it easy. Now, if you want to get it without having to think about it,
then you should sign up for it on our website as well. But look at that. Yeah.
Still got the plug. So, as we wrap up, how do you feel about the next three to six months
business-wise? You know, what's your beyond just like, I'm sure you're going to do many deals,
but like, what's your just general sentiment on, you know, we're going to continue seeing that
profit slide or any anything different that you have in mind for the next six months?
I hope the tough parts pass us through the first half. Again, we're coming off of a tough. The
third quarter is going to be the last tough comp from the prior year because there were the EV
mandates expiration there. But hopefully, the conflict and there's still a lot going on in
the Middle East. But hopefully, the worst has passed us. Hopefully, we've sort of waited through
some of these issues and the EKG is sort of calming down here. And so, hopefully, we get
to a more stable second half of the year. And I think that lines up with what we're hearing from
dealers, especially in the three-year outlook that we talked about. We see a lot of optimizing
from dealers over the next three years in terms of profit stability and increases. Again, focus on
fixed. We didn't talk about FNI, but FNI is a big driver of dealer focus and then expense
optimization. So, there's a lot of positives that we're seeing from dealers. And we think that
the M&A world is going to be alive and well. And we're going to see a strong finish to the year.
We're seeing that in our pipeline. We're just seeing that in deals that are announced and reported
on, especially by CDG and the great tracker that y'all have. We love that tracker. It's a great
tracker. The number one tracker in the industry. The best in the industry, for sure. Amazing.
George Corolla's Presidio group. George, thank you so much for coming on. Thank you, my friend.
It's great to be here. Look forward to the next one.
All right. I hope you enjoyed that episode. Please give the podcast a rating. Consider
subscribing to the show and check the show notes for links to the sponsors of today's episode,
plug, podium, and of course, the Presidio group. Thanks for tuning in and I'll see you guys next time.
About this episode
Deal activity is shaping up for a record buy/sell year, but the market is bifurcating: COVID-era buyers chased any deal, while today’s uncertainty and “flight to quality” are changing what gets bought and sold. George Karolis explains how operators think about profitability—especially fixed operations, FNI, and expense control—plus why used EVs and auction lanes don’t behave like gas cars. He also shares how top dealer groups manage portfolios, and why AI and frictionless processes are becoming table stakes.
Today I'm joined by George Karolis, President at The Presidio Group.
George breaks down why the average dealer is over 70 years old with no succession plan, why nearly 18% of dealers now say they want to sell in the next year, and why the biggest groups are trading luxury stores rather than walking away from them entirely.
He also unpacks why Toyota stores now trade like BMW and Mercedes dealerships, and why Carvana's rapid new-car growth might not be the experiment dealers think it is.
Topics:
02:30 Ernie Garcia's Tight-Lipped Strategy.
03:00 Carvana's 998-Unit Month.
09:00 18% Of Dealers Want Out.
13:00 Lexus Stores Trade Like Gold.
19:55 The Two Porsche Stories.
23:25 Toyota Trades Like Luxury.
This episode is brought to you by:
1. Plug - If your dealership is taking EV trade-ins or looking for used EV inventory, you need to check out @ here.
2. Podium - the AI platform trusted by one in three dealerships. Take a closer look @ here.
3. The Presidio Group - The Presidio Group is one of the longest-standing investment banks focused exclusively on automotive. Explore these and other industry insights @ here.
Presidio reports mentioned in today's episode:
Q2 2026 M&A Market Update / Presidio Valuation Index
Midyear 2026 Dealer Direction Survey
Q2 2026 Presidio-NCM Average Dealership Performance Benchmark
Q2 2026 Drive-In LIVE
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