Unlike Kerrigan, Samir Akhavan, managing partner at Toronto’s Templeton Marsh, is not convinced that the recent cross-border deals represent anything outside the status quo.
“Frankly,” he told Automotive News Canada, “I think this is hype.”
More often than not, Akhavan said, recent U.S. purchases by Canadian dealership groups have been a “continuation of old activity,” as opposed to new buyers pushing into the United States.
For the Foundation, Steele and Knight dealership groups, this is partially the case.
Despite being headquartered in Calgary, 21 of Foundation’s 23 locations are south of the border. Steele entered the U.S. in 2020 and backed up its initial three-dealership purchase with the recent Texas acquisition.
Knight’s December expansion into California, however, was the group’s first foray into the United States.
Outside of a handful of outliers, Akhavan does not see cross-border purchases as a “significant piece of the retail automotive puzzle.”
“If you want to do a deal, wouldn’t it be easier for you to do it with someone you know or know of than somebody you don’t know at all?” he said.
While Akhavan is skeptical about cross-border activity gaining traction, he expects further industry consolidation as dealers adapt — or head for the exit — due to challenges such as EVs and the agency model.
“Things are changing,” he said. Dealers “don’t know how much, how quickly, but a lot of these guys are starting to look for dance partners and they’re saying, ‘I don’t want to be the last guy on the dance floor without a dance partner.’ ”
—With files from Melissa Burden and Jack Walsworth