The rapid consolidation of the U.S. retail automotive industry is reflected in Kerrigan Advisors’ latest quarterly Blue Sky Report, which tracks dealership profits and buy-sell transactions to gauge the strength of the mergers and acquisition market.

Analysts say the number of transactions completed in 2025 could exceed last year’s record of 438. Transaction activity is growing at a compounded annual growth rate of 11.4%, having nearly doubled since 2019.

One key factor is strong sales and profits, analysts note, citing investor reports filed by the nation’s top six publicly traded dealer groups. Q3 filings show sales and earnings are up 5% over the trailing four quarters despite declining new vehicle grosses.

“Industry performance appears to be normalizing at a higher level than pre-pandemic periods, with
net-to-sales averaging 3.8%, a 41% improvement,” the report states.

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