{"id":35120,"date":"2026-07-13T19:52:00","date_gmt":"2026-07-13T17:52:00","guid":{"rendered":"http:\/\/stocks-future.com\/?guid=8a50459410d28f33930efdea9b05d3cd"},"modified":"2026-07-13T19:52:00","modified_gmt":"2026-07-13T17:52:00","slug":"ai-to-lift-dealership-profits-as-automakers-plan-to-absorb-the-bulk-of-tariff-costs-2026-kerrigan-oem-survey-finds","status":"publish","type":"post","link":"https:\/\/stocks-future.com\/?p=35120","title":{"rendered":"AI to Lift Dealership Profits as Automakers Plan to Absorb the Bulk of Tariff Costs, 2026 Kerrigan OEM Survey Finds"},"content":{"rendered":"

\nOEM executives expect dealership blue sky values to hold firm or rise, as 59% project AI will increase future dealership profits and <\/i>more<\/i> anticipate a network of fewer, larger dealers<\/i><\/p>

INCLINE VILLAGE, Nev.--(BUSINESS WIRE)--#AI<\/a>--Kerrigan Advisors today released the results of its fourth annual OEM survey, providing unique, and not often public, insights into the perspectives of US automotive manufacturer executives. Reflecting a strong outlook for US automotive retail among OEMs, the 2026 Kerrigan OEM Survey<\/a> reveals that OEMs are increasingly seeing AI as a profitability driver at the retail level, as they navigate softening new vehicle sales and absorb the lion\u2019s share of tariffs, all while maintaining confidence in dealership blue sky values and expecting a very active buy\/sell market in the year ahead.<\/p><\/a><\/a><\/a><\/a>

\n\u201cThe story of this year\u2019s survey is that OEMs see the economics of the dealership model getting stronger, not weaker,\u201d said Erin Kerrigan, Founder and Managing Director of Kerrigan Advisors. \u201cThey expect AI to increase future dealership profitability, and they plan to shoulder the bulk of tariff costs themselves rather than pass them to their dealers. That combination of rising dealer productivity and sustainably higher retail vehicle margins helps explain why OEMs project blue sky values to hold firm, or increase, even as vehicle prices climb and vehicle sales rates flatten.\u201d<\/p>

\nOEMs Expect AI to Increase Dealership Profits<\/b><\/p>

\nFor the first time, Kerrigan Advisors asked OEM executives how they expect AI to affect future dealership profits, and the results were decisive: 59% believe AI will increase dealership profits, while 37% expect no change, and just 4% anticipate a decrease. The finding is reinforced by the 2025 Kerrigan Dealer Survey, in which 90% of dealers reported they are already using or plan to use AI in their operations, indicating that the operational adoption needed to realize those gains is already underway. Kerrigan Advisors expects wide-scale AI deployment to reduce selling expenses and lift revenue per employee, boosting dealer productivity and profitability.<\/p>

\n\u201cAI is moving from experiment to infrastructure in the dealership,\u201d said Ryan Kerrigan, Managing Director of Kerrigan Advisors. \u201cWhen OEMs and dealers alike expect it to lower operating costs and raise revenue per employee, that\u2019s a structural improvement to the profitability of the business, and a meaningful part of why we project future dealership earnings and blue sky values to stay strong.\u201d<\/p>

\nBuy\/Sell Activity and Blue Sky Valuations Reflect OEM Confidence<\/b><\/p>

\nFor the first time, Kerrigan Advisors asked OEM executives about their expectations for dealership buy\/sell activity, and the results are compelling: 88% of OEM executives expect buy\/sell activity to accelerate or hold steady \u2013 consistent with the record activity recently reported in Kerrigan Advisors\u2019 recent Blue Sky Report\u00ae. Over a third (35%) are anticipating more buy\/sells for their franchises, while 53% expect activity to continue at today\u2019s elevated level.<\/p>

\nDealership valuation expectations reflect similar confidence: 82% of OEM executives expect dealership blue sky values to increase or remain the same, with 21% anticipating an increase and 61% projecting no change. Just 18% expect a decrease, versus 22% in 2025, a four-percentage-point improvement.<\/p>

\nFewer, Larger Dealers as Networks Consolidate and Facility Standards Rise<\/b><\/p>

\nThe survey results also reveal that OEM executives increasingly envision a dealership network of fewer, larger and better-capitalized retailers. Those who expect fewer dealers in their network in the next five years increased 12 percentage points, to 45% from 33% in 2025, while only 14% expect to add dealers. This reflects the industry\u2019s long-term consolidation trajectory, with buy\/sell activity now pacing at roughly double its pre-pandemic level. Rising facility standards are also accelerating that dynamic, with 43% of OEM executives indicating their organization will require a new image facility within five years.<\/p>

\n\u201cThe consolidation signal in this year\u2019s survey is significant: OEMs are planning for a network of fewer, but more profitable, dealers,\u201d said Erin Kerrigan. \u201cFor well-capitalized operators, this is a market that continues to reward scale and investment, and it\u2019s a major reason buy\/sell activity and valuations are expected to stay strong, as leading consolidators seek growth.\u201d<\/p>

\nTariffs Soften New Vehicle Sales Outlook; Long-Term EV Sales Growth Projected<\/b><\/p>

\nSentiment towards new vehicle sales softened this year. The percentage of OEMs projecting a decline in sales rose to 23% from 18% in 2025 \u2013 while those expecting an increase fell to 25% from 36%.<\/p>

\nThe softening sales outlook is closely tied to tariffs, and OEM executives were clear about where the cost will land: not on their dealers. A majority (58%) expect OEMs to bear the majority of US tariff costs and 37% expect those costs to fall to consumers, while just 5% expect dealers to be the primary absorbers. As OEMs realize the expense of tariffs, they are likely to both increase vehicle prices and scale back consumer incentives that support demand, a key driver of this year\u2019s weaker sales sentiment. Tariff assumption by the OEMs also helps reconcile two conflicting trends unfolding at once: new vehicle prices are rising and affordability is declining, yet dealership values are expected to hold firm or increase because dealer profitability is largely insulated from direct tariff pass-through expense.<\/p>

\nInterestingly, despite tepid EV sales and the elimination of both the federal EV tax credit and the CARB EV mandate during the survey period, OEMs show no signs of retreating from electrification. OEM executives surveyed expect that EVs will represent an average of 21% of their sales in five years \u2013 more than double current US EV market share. This positive projection is likely underpinned by their massive investment in EV development and production capacity, as well as China\u2019s rising influence on the global automotive industry.<\/p>

\n\u201cTariffs introduced real uncertainty into the new vehicle sales outlook, and that shows up clearly in the data,\u201d said Ryan Kerrigan. \u201cBut the more telling finding is who will absorb the cost \u2013 and OEM executives are not pointing at dealers. That distinction matters for dealership profitability, and it helps explain why valuations and transaction activity are projected to hold firm even in a more complicated sales environment.\u201d<\/p>

\nKey 2026 Kerrigan OEM Survey Data<\/b><\/p>