CBT News: Why Subaru’s slowdown is creating a window for dealer M&A

Subaru Dealers Face New Challenges as Market Dynamics Shift

On a recent episode of CBT News Inside M&A, Jim Fitzpatrick spoke with Brian Gordon, President of DCG, and David McComb, Director of Dealer Engagement at DCG, about the challenges facing Subaru dealers following the automaker’s latest earnings report and what those changes could mean for dealership valuations and M&A activity.

“The spoiler alert is this is a great brand that’s going through some real growing pains,” – Brian Gordon 

Dave Cantin Group’s experience completing 17 Subaru dealership transactions in recent years, Gordon and McComb shared why they believe the brand is entering a new phase.

While Subaru continues to benefit from a loyal customer base, dealers are facing pressure from rising material costs, tariff exposure, and increased competition from brands like Hyundai and Kia. Subaru’s U.S. sales have declined from pre-pandemic levels, while competitors have continued to grow with broader product lineups and value-focused pricing. The company also has a limited pipeline of all-new models over the next several years, although its recently announced performance vehicle initiative could provide a positive signal for retailers.

Another challenge is Subaru’s exposure to tariffs. Approximately 70% of the company’s global sales come from the U.S., but only about 40% of the vehicles sold here are built domestically. As the automaker works to adjust its production and supply chain, dealers should expect these pressures to remain in the near term.

Those market conditions are having the biggest impact on dealers operating standalone Subaru stores without nearby sister locations. With significant facility image program investments on the horizon, many owners are taking a closer look at their long-term strategy.

“I think what we’re beginning to see is those Subaru dealers that have those points on an island, they’re making the decision that now is probably the time either to buy more stores around it or to divest that store, because valuations are still great.” – David McComb

Whether the right path is growth or a sale, Gordon and McComb emphasized that understanding a dealership’s value and strategic options is more important than ever. For Subaru dealers evaluating their next move, today’s market presents an opportunity to make informed decisions while valuations remain strong.