While most dealers believe franchise values will either increase or remain the same over the next 12 months, the newly released 2024 Kerrigan Dealer Survey found certain franchises saw a sharp decline in valuation expectations due to an oversupply of new vehicle inventory and a significant decline in franchise profitability.
Dealers expect Lexus, Toyota, Honda, Kia, and Subaru to have the highest gains in valuation over the next 12 months, with over 30 percent anticipating an increase in their value.
This marks the first time Lexus has led the category, while Honda returns to the top five list after being absent last year. Kia, which led the category last year, experienced an 11-percentage point decline in dealer expectations while Hyundai dropped out of the top five after placing second in 2023.
Dealership Values
On the other side, over 64 percent expect CDJR, Infiniti, Lincoln and Nissan to decline in value in 2025. Kerrigan officials noted CDJR and Nissan saw a 20-percentage point increase in the percentage of dealers expecting a decrease in valuation.
As for dealers’ trust level in each franchise, Toyota continues to hold the top, with 83 percent of dealers showing a high level of trust in the franchise— nearly 3.5x higher than the survey average of 24 percent. Conversely, 72 percent of dealers reported they had no trust in CDJR which is consistent with the valuation degradation expectation.
“The ‘no trust’ levels for Stellantis, Lincoln, Infiniti and Nissan are the highest we’ve seen since we first asked this question,” said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors, in a statement released with the survey. “For context, the worst result previously recorded by any franchise was Ford at 48 percent ‘no trust’ – but Stellantis has now reached 72 percent and Nissan is at 58 percent.”
Report Highlights
Notable changes in franchises’ expected valuations from the 2024 Kerrigan Dealer Survey:
- Ford, after ranking as the least trusted franchise by dealers in 2023, saw a marked improvement in 2024 increasing 11 percentage points .
- CDJR now ranks as the most likely brand to decline in value in 2024, with 76 percent of respondents predicting a decline and only five percent expecting an increase, matching Nissan for largest increase in valuation decline
- Nissan ranked the second least sought-after non-luxury franchise by today’s buyers, with just 10 percent looking to add the franchise in 2025, and for the second consecutive year it ranked the second least trusted non-luxury OEM and third overall—just after Infiniti.
Dealerships Looking to Expand
For the first time, Kerrigan Advisors asked dealers which franchises they are seeking to add to their enterprise in 2025. Toyota and Lexus are by far the most requested brands in their buyer database and in this year’s survey, according to Ryan Kerrigan, Managing Director of Kerrigan Advisors.
Toyota leads the industry in trust, with 83 percent of respondents reporting a ‘high level of trust’ in the OEM, supported by its stronger buyer demand. Lexus achieved the second-highest year-over-year increase in trust for 2024, with a 16-percentage point increase in dealers reporting a ‘high level of trust’.
“The measured approach the OEM takes to network size, EV strategy and inventory management are highly attractive to dealers today,” said Ryan Kerrigan. “Dealers are seeking to invest in franchises they trust, and Toyota and Lexus continue to reign supreme in that category.”
2025 Outlook
Overall, Kerrigan Advisors believes 2025 will be a robust year for buy/sell activity with buyers seeking the most trusted brands and continuing to divest of those they find more challenging
“A significant number of dealers will look to acquire dealerships in the year to come, indicating a positive industry outlook overall. Nevertheless, dealers have distinctly varying views on specific franchises, with certain OEMs eliciting a lack of trust and confidence, while others earn a high level of trust and strong profit expectations,” concluded Ryan Kerrigan.