Factory Execs Bullish on Dealer Profits, See AI as Key to Future Earnings
A strong majority of OEM executives expect franchised dealership valuations and profits to hold steady or improve, and most see AI as a meaningful driver of future earnings growth, according to the 2025 Kerrigan OEM Survey.
Fifty-nine percent of surveyed OEM executives expect AI to increase future dealership profitability — a finding Kerrigan Advisors says is already influencing how buyers underwrite acquisitions, with some of the industry’s largest consolidators beginning to factor projected AI cost savings into their pro formas.
“Kerrigan Advisors expects the wide-scale deployment of AI across dealership operations to reduce dealership selling expenses and enhance revenue per employee, thereby increasing dealers’ productivity and profitability levels,” the report states.
The survey finds 78% of factory execs expect dealership blue sky values to remain the same or increase, and 66% expect dealership earnings to increase or stay the same in the near term.
On the OEM-dealer relationship, 92% of respondents expect the dealer to play a leading or co-leading role in managing the customer relationship over the next five years, with 56% saying they do not expect the direct sales model to take hold in the U.S.
