Buy/Sell Market Setting Records, Ford Pro Architect Retires, Discretionary Spending On The Rise

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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Is it already the end of another week? We’re looking back this morning as we look at buy/sell activity from the first half of the year, reflect on the legacy of Ford Pro CEO Ted Cannis, and dig into how discretionary spending is on the rise.

• The first half of 2024 has shattered records in the dealership buy/sell market. With 204 dealership transactions completed and 381 franchises sold, this is nearly double pre-pandemic levels. So, what’s fueling this surge?
  • Blue sky values are up 74% from pre-pandemic, driving sellers to cash out.
  • Despite a 35% drop in average earnings, consolidation continues strong as multi-dealership sales (55 transactions) account for 27% of the market.
  • Public dealer groups have $7.4B in capital, driving the frenzy.
  • Shout out to all of our friends at Lithia & Driveway, Morgan Auto Group, Ciocca Automotive, Ourisman Automotive Group, Nucar Family of Dealerships, Hudson Automotive Group, Premier Truck Group, just to name a few of the many auto groups who have gained new partners this year.
  • A Kerrigan Advisors report reveals, "This unprecedented market activity highlights the industry's ongoing transformation."

• Ted Cannis, CEO of Ford Pro and key architect of Ford's commercial vehicle division's success, is set to retire at the end of September. His leadership helped Ford Pro become a $70 billion business within just a few years.
  • Cannis led development of the Mustang Mach-E and had key roles in Ford's overseas operations.
  • Ford Blue President Andrew Frick will serve as interim Ford Pro CEO while a replacement is sought.
  • Ford Pro’s earnings forecast was raised by $1 billion, expected to reach $9-$10 billion for 2024.
  • CEO Jim Farley praised Cannis’ role in driving Ford Pro’s success and technological growth.
  • Cannis emphasized Ford Pro’s unmatched scale, service, and dealer network, saying "Leading Ford Pro has been the most thrilling chapter of my career, and I’m excited to see its continued growth."
• Despite continued economic uncertainty and consumer caution, discretionary spending is beginning to show signs of recovery in certain sectors. While overall non-discretionary spending remains strong, discretionary categories like apparel, home goods, and electronics are seeing early signs of a rebound.
  • A Deloitte survey found that discretionary spending was down 18.6% from 2021, while non-discretionary spending rose by 3.3%.
  • Discounters like Dollar General and Ross Stores report that their customers remain focused on necessities, with discretionary spending still soft.
  • However, some categories, including apparel and home improvement, are seeing renewed consumer interest ahead of the holiday season.
  • Target reported a 9% jump in beauty sales during Q2, and Best Buy saw a 6% year-over-year increase in computer and tablet sales.
  • KPMG’s Duleep Rodrigo highlighted positive spending trends in areas like tr

Hosts: Paul J Daly and Kyle Mountsier
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