2017 auto dealers’ year in review · cent; however, car sales dropped for the third year in a...

16
HENDERSON HUTCHERSON & MCCULLOUGH, PLLC CHATTANOOGA, TN | MEMPHIS, TN 2017 AUTO DEALERS’ YEAR IN REVIEW

Upload: others

Post on 22-May-2020

0 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

H E N D E R S O N H U TC H E R S O N & M C C U L LO U G H , P L LC CHATTANOOGA, TN | MEMPHIS, TN

2017 AUTO DEALERS’ YEAR IN REVIEW

Page 2: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

In 2017 consumers’ appetites for trucks and SUVs/CUVs continued

to push unit sales growth, but de-mand for cars declined once again. Dealership profit margins are still shrinking, but to a lesser degree than in previous years. The average trans-action price continued to climb, as off-market leases coming into the market did not push down prices on used vehicles like many believed it would. The market withstood several interest rate hikes in 2017, and will likely see more in 2018.

2017 SALES OVERVIEW

Light vehicle sales declined in 2017, ending a seven-year streak of positive sales growth. Despite a 1.9 percent sales decline, 2017 registered the fourth-highest year of light vehicle sales. An all-time high mark of 17.55 million was reached in 2016. Sales of

light trucks, SUVs, and CUVs lifted overall unit sales, growing 4.4 per-cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing between cars and light trucks/SUVs/CUVs. Figure 2 further dissects the trend in unit sales, showing light vehicle sales by vehicle type.

Domestic car sales fell by 10.3 percent, while domestic light trucks/SUV/CUVs increased 2.5 percent from 2016 to 2017. The largest swing in sales was made in the import market as sales of import cars fell 15.3 percent while import trucks/SUVs/CUVs grew 11.7 percent. According to Edmunds, SUVs are growing as a percent of the luxury market (much of which are in the import category). Edmunds expects small SUVs to

AT THE BEGINNING OF

2017, MANY BELIEVED

THE AUTO INDUSTRY

WOULD SLOW FROM ITS

DRAMATIC PACE OF

GROWTH; AND IT DID,

BUT ONLY BY A LITTLE.

2017 AUTO DEALERS’ YEAR IN REVIEW

1

Page 3: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

2

20,000,000

18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

20,000,000

18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

1951

1955

1959

1963

1965

1967

1971

1973

1974

1975

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

20012003200520072009201120132015

CARS LIGHT TRUCKS/SUVS/CUVS

TOTAL U.S. LIGHT VEHICLE SALES

2017

Figure 1

10,000,000

9,000,000

8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

DOMESTIC CAR DOMESTIC LIGHT TRUCK IMPORT CAR IMPORT LIGHT TRUCK

U.S. LIGHT VEHICLE SALES BY VEHICLE TYPE

2017

2016

-10.3%

2.5%

-15.3% 11.7%

Figure 2

SOURCE: WARDSAUTO & BEA

SOURCE: WARDSAUTO

Page 4: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

3

Chart 4

account for 29 percent of the luxury market in 2018 – up from 16.5 percent in 2013 and 8.5 percent in 2008.1

Unit sales for big three domestic manufacturers were down in 2017 year-over-year. Unit sales of Ford and GM slipped 1.2 percent and 1.4 percent, respectively. Unit sales by FCA were hit hard, declining 8.4 percent. FCA sold approximately 186,000 fewer vehicles in 2017 as it did in 2016, with some of the decline attributable to the company’s strate-gy to reduce sales to daily rental car companies. The Jeep brand, traditionally the FCA’s strongest, fell off 11 percent in 2017, pulled down largely by a 67 percent drop in Patriot sales. The Grand Cherokee was the only name in the Jeep family to record positive sales growth, up 13 percent.2

Other notable sales declines in 2017 are Hyundai and Kia, falling 11.5 percent and 8.9 percent, respectively,

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

FORD GM

HONDA

HYUNDAIKIA

MOTORS

NISSAN

SUBARU

TOYOTA

AUDI

BMW

DAIMLER

FCA

JAGUAR

LAND ROVER

VOLKSWAGEN

VOLVO

PORSCHE

U.S. LIGHT VEHICLE SALES BY COMPANY

2017

2016

Figure 3

in 2017 compared to 2016. Hyundai announced plans to launch a pickup truck and a small SUV, the Kona, in the U.S. as part of a broader plan to meet consumer demand for trucks and SUVs. Figure 3 above shows a year-over year comparison of the major brands.

The top selling car in 2017 was the Toyota Camry, edging out the Honda Civic by approximately 10,000 units. The Honda Accord was third. Figure 4 shows the top selling cars in the U.S. last year.

Camry had enjoyed a 15-year reign as the nation’s top selling vehicle, excluding pickup trucks, until 2017 when it was surpassed by the Toyota Rav4 and the Nissan Rogue. There were about 387,000 Camrys sold last year, with approximately 400,000 Rav4 and Rogue units sold.

According to CNN Money, Ford has

sold enough F-series trucks to circle the earth more than three times.3 To nobody’s surprise, the Ford F-series trucks maintained their place as the top seller of all vehicles in 2017. Chevy Silverado and RAM were a distant 2nd and 3rd place, respectively, in total vehicles sold. Ford announced last year that it will introduce a hybrid version of the F-150 in 2020. Figure 5 shows the nation’s top selling trucks/SUVs/CUVs in 2017. AVERAGE TRANSACTION PRICE

For the month of December 2017, Kelley Blue Book reported the esti-mated average transaction price (ATP) for new light vehicles in the U.S. to be $36,133, an increase of 1.6 percent from December 2016 and a record high mark. ATP for all of 2017 was up 2 percent over 2016, demon-strating slightly lower annual price growth than the 2.5 percent growth recorded in 2016 and 2015. The average new vehicles down payment

-1.2%

-1.4%

0.2% 1.9%

1.9%

-0.6%

7.8%-3.4% -1.4%

-8.4%

8.8% 2.1% -1.5%

5.2%-11.5% -8.9%

SOURCE: WARDSAUTO

Page 5: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

4

Chart 4

Chart 4

450,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

CAMRY

F SERIES

CIVIC

SILVERADO

ACCORD

RAM PICKUP

COROLLARAV4

ALTIMA

ROGUE

SENTRACR-V

FUSION

ESCAPE

ELANTRA

EQUINOX

MALIBU

EXPLORER

CRUZE

GRAND

CHEROKEE

2017 TOP SELLING CARS IN U.S.

2017 TOP SELLING TRUCKS/SUVS CUVS IN U.S.

Figure 4

Figure 5

SOURCE: WARDSAUTO

SOURCE: WARDSAUTO

Page 6: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

5

in December 2017 reached an all-time high of $4,056, a 5.9 percent increase vs. December 2016.4

The ATP for used vehicles in the third quarter of 2017 was $19,402, up just 0.9 percent from the same time 2016. Edmunds reported that the share of sales of three-year-old and newer vehicles has stabilized and isn’t pulling the average toward higher “near new” pricing as that segment had in the past. Lease returns are slated to continue hitting the used market at unprecedented rates and will exacerbate the disparity between what is desired (older, cheaper vehicles) and what is available in the

used market. A predicted 3.5 million vehicles will be returned from leasing in 2017 compared to 3.2 million units in 2016.5

As sales softened in the industry in 2017, incentives increased. In October 2017, J.D. Power and LMC Automo-tive reported that incentive spending increased for the 43rd month in a row. The average incentive per unit was $3,901 based on data through early October 2017. According to Edmunds, incentive spending is expected to decline as automakers better match production with lower levels of demand. Others see incentive spending leveling off, as an analyst at

Kelley Blue Book stated in a press release, “Incentive spending was a concern in 2017, averaging 10.7 percent of MSRP, but encouragingly, this figure held flat over the final quarter of the year.”7

THE LEASE EFFECT

In 2015, four million vehicles were leased, up 12 percent from 2014. This number grew to 4.3 million in 2016, triple the amount in 2009. In 2017 and in the years to follow, the amount of off-lease used cars coming into the market may put downward pressure on used car pricing. Figure 6 shows the growth in lease penetration rates since 2002.

Chart 4

35%

30%

25%

20%

15%

10%

5%

0

U.S. LEASE PENETRATION RATES

Figure 6

SOURCE: EDMUNDS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EST.2018

17% 17% 17%

19% 19%20%

21%22% 22%

26%

27%

29%

31%30% 30%

16% 16%

Page 7: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

6

RETAIL USED SALES Q3 2012 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2017Q3 2017 vs.

Q3 2017

AVERAGE MILEAGE OF USED VEHICLES

61,330 60,791 59,094 56,963 53,303 52,648 -14%

% SALES OF VEHICLES 3 YEARS OR NEWER

46.3% 50.4% 53.6% 55.9% 60.0% 59.4% 28%

Figure 7

SOURCE: EDMUNDS

In its 2018 Industry Trends report, Edmunds reported that it expects record lease returns in 2018. As the industry absorbs more off-lease vehicles into the marketplace, the volume of three-year-old vehicles has drawn the mileage average down 14 percent within five years. These newer, low mileage vehicles carry the highest price tags, rivaling new vehicles. This presents the industry

with a dilemma that is only primed to get worse. High levels of lease returns coupled with increasingly stringent mileage limits will feed an expanding pool of low-mileage used vehicle inventories that have proven to have a limited buying audience, Edmunds reported.8 Figure 7 shows the trend in average mileage of vehicles sold and the percent of sales of vehicles three years old or newer.

Used vehicle sales fell 3 percent in Q3 2017 versus the previous year as a result of 2017 hurricanes hitting major markets in Texas and Florida. However, the replacement of the lost vehicles helped sales in September and November. Up to 500,000 vehicles were damaged or destroyed during Hurricane Harvey and another 200,000 during Hurricane Irma, according to industry estimates.9

Page 8: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

7

Figure 8

Figure 9

Figure 10

14%

12%

10%

8%

6%

4%

2%

0

16%

14%

12%

10%

8%

6%

4%

2%

0

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0

YE 2013

YE 2013

YE 2013

11.8%

6.9% 6.8% 6.6% 6.1% 6.0%

13.7% 13.3% 13.2% 12.8% 12.7%

29.9

%28

.2%

41.9

%

30.4

%27

.5%

42.1%

30.5

%27

.3%

42.2

%

29.0

%27

.0%

43.9

%

28.5

%27

.1%44

.3%

11.6% 11.3% 11.0% 11.2%

2.6% 2.6% 2.6% 2.3% 2.2%

YE 2014

YE 2014

YE 2014

YE 2015

YE 2015

YE 2015

YE 2016

YE 2016

YE 2016

YTD OCT 2017

YTD OCT 2017

YTD OCT 2017

TOTAL GROSS AS % OF SALES PRE-TAX PROFIT MARGIN

SOURCE: NADA DEALERSHIP PROFILE

SOURCE: NADA DEALERSHIP PROFILE

SOURCE: NADA DEALERSHIP PROFILEDOMESTIC DEALERS

DOMESTIC DEALERS

DOMESTIC DEALERS

NEW VEHICLE GROSS AS % OF SELLING PRICE

NEW VEHICLE GROSS AS % OF TOTAL GROSSFIXED OPS GROSS AS % TOTAL GROSS

USED VEHICLE GROSS AS % OF SELLING PRICE

USED VEHICLE GROSS AS % OF TOTAL GROSS

MARGIN ANALYSIS

Domestic auto dealers, Ford, FCA, and GM have seen average gross profit margins decrease in each year 2013 – 2016, but witnessed a slight uptick through the Q3 2017. Pre-tax profit margins held steady 2013 – 2015 at 2.6 percent, but fell to 2.3 percent in 2016 and 2.2 percent through Q3 2017. Figure 8 below shows the trend in gross profit margin and pre-tax profit margin. Figure 9 shows the decline in new and used vehicle margin over five periods. New vehicle gross margin was 6.9 percent in 2013, but has fallen to 6 percent for the year-to-date as of October 2017. Used gross margin has declined 100 basis points from 2013 to the year-to-date as of October 2017.

Gross profit contribution from fixed operations as a percent of total store gross profit has increased over recent years. As of the most recent period, gross profit from fixed operations accounted for 44.3 percent of total

IMPORT DEALERS HAVE SEEN GROSS MARGINS DECLINE TO

A LESSER DEGREE THAN DOMESTIC DEALERS, AND CONTINUE TO MAINTAIN A COMPARATIVELY HIGHER

GROSS MARGIN.

Page 9: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

8

Figure 11

Figure 12

14%

12%

10%

8%

6%

4%

2%

0

14%

12%

10%

8%

6%

4%

2%

0

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0

YE 2013

YE 2013

YE 2013

12.2%

6.3% 6.2% 6.3% 5.9% 5.6%

12.7% 12.4% 12.0% 11.5% 11.2%

28.8

%23

.2%

48.0

%

28.8

%23

.3%

48.0

%

28.5

%23

.2%

48.2

%

26.8

%23

.0%

50.3

%

25.4

%23

.1%51

.5%

11.9% 11.8% 11.7% 11.8%

2.6% 2.6% 2.7% 2.6% 2.6%

YE 2014

YE 2014

YE 2014

YE 2015

YE 2015

YE 2015

YE 2016

YE 2016

YE 2016

YTD OCT 2017

YTD OCT 2017

YTD OCT 2017

TOTAL GROSS AS % OF SALES PRE-TAX PROFIT MARGIN

SOURCE: NADA DEALERSHIP PROFILE

SOURCE: NADA DEALERSHIP PROFILE

SOURCE: NADA DEALERSHIP PROFILEIMPORT DEALERS

IMPORT DEALERS

IMPORT DEALERS

NEW VEHICLE GROSS AS % OF SELLING PRICE

NEW VEHICLE GROSS AS % OF TOTAL GROSSFIXED OPS GROSS AS % TOTAL GROSS

USED VEHICLE GROSS AS % OF SELLING PRICE

USED VEHICLE GROSS AS % OF TOTAL GROSS

Figure 13

gross profit for domestic dealers, the increase indicative of the declining profit margins from unit sales. Figure 10 shows the gross margin segmentation of domestic dealers.

Import dealers have seen gross margins decline to a lesser degree than domestic dealers, and continue to maintain a comparatively higher gross margin.10 For the year-to-date through October 2017, gross profit margin for import dealers was 11.8 percent. Pre-tax profit margins have held steady at 2.6 percent.

New import vehicle gross margins have declined in each period since 2015, falling to 5.6 percent in the most recent period. Used vehicle gross margins have declined also, posting an average of 11.2 percent through Q3 2017. Figure 12 shows the new and used gross margins for import vehicles.

Gross profit from fixed operations as a percent of overall gross profit has increased for import dealers over the observed period. Figure 13 shows the progression of gross profit contribution from fixed operations, along with the decline of gross profit from new vehicle sales.

Luxury dealers bucked the declining -margin trend through October 2017.11 Total gross profit margin increased in 2017 to 11.5 percent, up from 10.9 percent in 2016. Pre-tax profit margins have held fairly steady over the observed period at 2.8 percent. Figure 14 shows the trend.

Page 10: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

9

Page 11: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

Figure 14

Figure 15

Figure 16

14%

12%

10%

8%

6%

4%

2%

0

12%

10%

8%

6%

4%

2%

0

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0

YE 2013

YE 2013

YE 2013

11.7%

5.6% 5.2% 5.1% 5.1% 4.7%

9.8% 9.8%

8.7% 8.4% 8.4%

25.5

%17

.5%

57.0

%

25.0

%19

.1%56

.0%

23.4

%18

.8%

57.7

%

22.7

%18

.5%

58.9

%

20.9

%19

.0%

60.0

%

11.2% 10.7% 10.9% 11.5%

2.8% 2.6% 2.8% 2.7% 2.8%

YE 2014

YE 2014

YE 2014

YE 2015

YE 2015

YE 2015

YE 2016

YE 2016

YE 2016

YTD OCT 2017

YTD OCT 2017

YTD OCT 2017

TOTAL GROSS AS % OF SALES PRE-TAX PROFIT MARGIN

SOURCE: NADA DEALERSHIP PROFILE

SOURCE: NADA DEALERSHIP PROFILE

SOURCE: NADA DEALERSHIP PROFILELUXURY DEALERS

IMPORT DEALERS

IMPORT DEALERS

NEW VEHICLE GROSS AS % OF SELLING PRICE

NEW VEHICLE GROSS AS % OF TOTAL GROSS

FIXED OPS GROSS AS % TOTAL GROSS

USED VEHICLE GROSS AS % OF SELLING PRICE

USED VEHICLE GROSS AS % OF TOTAL GROSS

10

New and used vehicle gross profit margins are in decline for luxury dealers. Average gross profit margin for new and used vehicles through the third quarter of 2017 was 4.7 percent and 8.4 percent, respectively.

Luxury dealers rely more on fixed operations than other dealers, as demonstrated in Figure 16, showing that 60 percent of a dealership’s gross profit is derived from fixed operations, no doubt the reason pre-tax profits have held steady for luxury dealers.

THE TAX CUTS AND JOBS ACT

Congress passed the largest piece of tax reform legislation in more than 30 years in late 2017. The tax overhaul brings many changes beginning in 2018, but perhaps the biggest news for automotive dealers is what doesn’t change – the deductibility of interest expense for floor plan interest. The new law generally limits the deductibility of business interest expense to 30 percent of taxable income. However, floor plan interest remains fully-de-ductible. Additionally, Congress voted to keep intact the consumer tax credit of up to $7,500 for the purchase of electric vehicles.

Most economist believe the bill will provide a shot in the arm to the U.S. economy, but the long-term effects are less predictable. As reported by Business Insider, the Joint Committee on Taxation, the official scorekeeper in Congress, said the bill would boost gross domestic product by 0.8 percentage points over the first 10 years the bill was passed, not that impressive when

Page 12: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

11

broken down by year. The Tax Policy Center estimated that the average American will get a tax cut of $1,610 in 2018. Tax payers in the middle quintile of earners would get a cut of $930 on average in 2018 and $910 by 2025. About 80 percent of people would see a tax cut in year one of the legislation, the Tax Policy Center estimated.12

INTEREST RATES

The Federal Reserve hiked rates three times in 2017. The third hike, occur-ring in December, set the U.S. prime rate at 4.5 percent. Many expect the Federal Reserve to hike rates three more times in 2018. After December

2017 retail sales increased by a strong 5.4 percent over the previous year, some experts are suggesting four rate hikes may be in store for 2018.

SUMMARY

The auto industry slowed in 2017, but still recorded a great year. Average transaction prices continued to climb as a result of a growing economy and the consumer’s preference for trucks and SUVs. But while vehicle prices are rising, dealers’ margins continue to shrink. Off-market leases coming back to dealers’ lots may put pressure on prices, causing used vehicle margins to shrink even more. Incentive spending continued to rise in the first half of

the year, but appear to have leveled off in Q3 2017. Tax cuts should provide good momentum for dealers going into 2018, but rising interest rates could offset buyer enthusiasm. By Travis Flenniken, CFA, CVA

Page 13: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

SOURCES

1. Edmunds, 2018 Automotive Industry Trends, December 20172. FCA US Reports 2017 December and Full-Year Sales, PRNewswire, Jan 3, 20183. Ford: F-Series is best-selling truck for 40 years, Aaron Smith, CNN Money, January 4, 2017 4. Lutz, Hannah. Average new-car down payment, transaction price hit all-time highs, January 10, 2018 5. Edmunds Used Vehicle Market Report for Q3 20176. Ibid7. Kelley Blue Book Media Room, Average New-Car Prices Set Record High, Up Nearly 2 Percent in December 2017, According to Kelley Blue Book.

January 3, 20188. Ibid9. Ibid10. Import dealers in the study include Acura, Audi, BMW, Honda, Hyundai, Infiniti, JLR, Kia, Lexus, Mazda, Mercedes, Mitsubishi, Nissan, Porsche,

Subaru, Toyota, Volkswagen, and Volvo11. Luxury dealers included in the data are Acura, Audi, BMW, Infiniti, JLR, Lexus, Mercedes, Porsche, and Volvo12. Bryan, Bob, “Here's how the newly passed GOP tax bill will impact the economy, businesses, the deficit, and your wallet”, businessinsider.com.

December 20, 2017

Page 14: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

13

LET THE HHM DEALERSHIP SERVICES GROUP HELP YOU TODAY

OUR CONSULTING SERVICES:

TRADITIONAL ACCOUNTING SERVICES

• Audit & Attest Services• Tax Planning/Preparation• Estate/Succession Planning• LIFO Services• Internal Control Reviews• Business Valuations• Cost Segregation Studies• 401(k) Plan Services/Investments• Litigation Support• Educational Seminars• Temporary Controller Support• Personnel Recruitment & Screening

NON-TRADITIONAL ACCOUNTING SERVICES

• Operational Reviews• Expense Analysis & Control• Floorplan Analysis Including Terms & Structure • Buy/Sell Structure & Negotiation• Accounting Staff Training• DMS Optimization• Business Performance Analysis & Forecasting • Financing Alternatives & Capital Analysis• Reinsurance Company Alternatives/Structure • Buy-Here/Pay-Here Consulting• Related Finance Company Structuring• Interim Controller/Office Manager Support

TRAVIS HORTON, CPA, MBA

[email protected]

RANDALL HEBERT, CPA, CVA,

CGMA, MBA

[email protected]

DONNIE HUTCHERSON, CPA,

CGMA, MBA

[email protected]

DARRIN YODER, CPA

[email protected]

CHATTANOOGA1200 Market StreetChattanooga, TN 37402P 423.756.7771 F 423.265.8125

MEMPHIS1755 Kirby Parkway, Suite 200 Memphis, TN 38120P 901.683.4234 F 901.763.2795

Page 15: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

REPRESENTATIVE ENGAGEMENTS

Randall Hebert

JackLondon

Matt Stelzman

Contact the HHMValuation Services Group

for your forensics, litigation, and valuation needs.

423.756.7771 | HHMCPAS.COM/VALUATION

BUSINESS VALUATION

$35,000,000

HIGHLINE & IMPORT

DEALERSHIP

MULTI-POINT

BUSINESS VALUATION

$3,300,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$3,700,000

IMPORTDEALERSHIP

BUSINESS VALUATION

$2,700,000

IMPORT DEALERSHIP

BUSINESS VALUATION

$12,500,000

HIGHLINE DEALERSHIP

BUSINESS VALUATION

$2,200,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$1,300,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$3,200,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$5,300,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$25,500,000

IMPORT DEALERSHIP

BUSINESS VALUATION

$38,000,000

IMPORT DEALERSHIP

BUSINESS VALUATION

$1,550,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$1,100,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$2,300,000

MULTI-BRAND DEALERSHIP

BUSINESS VALUATION

$10,000,000

MULTI-POINT DEALERSHIP

BUSINESS VALUATION

$4,600,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$5,800,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$3,700,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$6,800,000

IMPORT DEALERSHIP

BUSINESS VALUATION

$6,900,000

IMPORT DEALERSHIP

BUSINESS VALUATION

$5,900,000

DOMESTIC DEALERSHIP

BUSINESS VALUATION

$63,000,000

IMPORT DEALERSHIP

BUSINESS VALUATION

$1,300,000

POWERSPORT DEALERSHIP

BUSINESS VALUATION

$14,500,000

BUY HERE/PAY HERE

DEALERSHIP

BUSINESS VALUATION

$15,900,000

BUY HERE/PAY HERE

DEALERSHIP

Page 16: 2017 AUTO DEALERS’ YEAR IN REVIEW · cent; however, car sales dropped for the third year in a row, falling 11.5 percent year-over year. Figure 1 shows the trend of unit sales, distin-guishing

HHM accountants are ready to help you

and your business through any transition.

HHMCPAS.COM

CHATTANOOGA 423.756.7771 MEMPHIS 901.683.4234

AS YOU MOVE FROM ONE PHASE TO THE NEXT,

YOUR ACCOUNTANT BECOMES YOUR MOST TRUSTED ADVISOR.

WE SPECIALIZE IN