A parking lot filled with various types and brands of cars.

2020-21: Reflections in Life and Automotive

An Interview with Dave Cantin

We hardly need to hear it again. 2020 was quite the year. And as we get farther into 2021, it’s clear we’re not out of the woods yet. But it’s worth looking back on the past year in the automotive industry, which despite the challenges, tells an unexpectedly inspiring story. The industry showed fortitude, tenacity and perseverance, while providing many practical and motivational lessons we can take into 2021.

What Made the Automotive Story Unique in 2020?

2020 began as a strong (but mostly predictable) year in Automotive. Then, as in most industries, everything came to a halt as COVID-19 hit in March.

The automotive industry stands out for the way it bounced back in two major instances: first the initial onset of the pandemic, and then the deficit of new inventory. Following a very difficult March and April, May and June were some of the best months in automotive history. Dealers quickly learned to serve customers safely, both in person and through increased online sales.

Yet, as inventory flew off the lots, production from the manufacturers was way behind.

Dealerships got scrappy. Many had proactively bought inventory from other lots. Others upped their game around CPO vehicles, or artfully rode the wave of shifting supply and demand.

As we enter 2021, the pandemic continues, but dealership sales, vehicle manufacturing, and mergers & acquisitions have remained steady. With vaccine distribution underway, there’s a light at the end of the tunnel, and we’ll emerge stronger than we were before.

What does this story look like for a leader in Automotive M&A?

Dave Cantin got on the phone to look back on 2020 and ahead to 2021. He reflects through two lenses: one as an expert in the Automotive Mergers & Acquisition (M&A) market, and one as a human being on a constant journey of personal growth.

This interview was edited for publication on this blog.

What has been the state of the automotive acquisitions market through 2020—before, during, and after shutdown, leading up to the start of 2021?

We entered 2020 anticipating one of the greatest years in history, due to many factors, one of them consolidation. The bigger private and public companies were buying as many stores as possible, and we saw a lot of momentum from Q4 ‘19 pushing into Q1 ‘20.

Then the industry shut down on March 13th, and everyone who was considering investing millions of dollars woke up and said, “Wait. How do I consider buying when I have to focus on maintaining what I already have?”

In this situation, there’s no book to read, there’s no podcast to listen to, nobody to call and ask what to do, because none of us has ever been in this situation. We were all working one day at a time to figure it out.

DCG decided that it was our moral obligation to be there for our clients. In March, April, May and June, we really focused on maintaining our relationships, doing everything we could for our clients, not for DCG.

Come July we decided, “OK, let’s turn it back on.”

A lot of our deals Q3 and Q4 came to us because of what we did during Q2, because we understood that we needed to be there for our clients.

DCG finished 2020 with incredible results, better than we expected pre-pandemic. We’re going into 2021 with more pending acquisitions than we had through all of 2020. That tells you how explosive the industry is right now.

Besides low interest rates, are people who are buying and selling dealerships during the pandemic approaching the process differently, or is it mostly ramping up the same way it was before?

There’s nothing that’s the same, so you could take that word ‘same’ and throw it in the garbage.

When people say we’ll go back to normal… What’s normal? Change is part of life. You always have to adapt. Those in the automotive industry who think they can go back to the way that they operated in January, February, March of 2020— they have another thing coming.

Moving forward, dealers are positioning themselves to understand what consumers want— there’s a new way of servicing your car, of buying a car, of marketing, of bringing a car in for service.

The greatest word I’ve been hearing over the past six months is communication. There’s a new way to communicate with your consumers, and those who are not properly communicating with the consumer are not going to retain that consumer.

The dealers that understand the change are the ones who are going to be in the M&A market buying more stores, because they are embracing this new business model of how to communicate and how to approach the consumer in a safe way.

I also think consolidation, over the next three years, will continue to rise. The dealers that were considering, before the pandemic, to sell within five years are now probably looking to sell within the next five months to a year. This past year has really sped them along.

Going into 2021, is there still an opportunity for first-time dealership buyers like general managers, or are those days over?

I don’t think the days where GM’s become owners will ever expire. Part of the American dream is climbing that ladder. When I was a general manager, I used to pull into the dealership every day—first one in, last one to go home—as if it was mine.

When you work towards something, believing it is manifesting it.

That’s part of what America is built upon— that opportunity for every individual.

I think if you take that away in any industry, America goes backwards. I don’t foresee it ever going away, and I still see every day in this industry, general managers with the opportunity to either buy in as executive managers with a percentage of ownership, or one day succeeding and taking over their dealerships in full ownership.

Are there certain brands to look out for in acquiring a dealership in 2021? Any brands with exciting new tech or electric vehicles?

Look at Hyundai and Genesis. They’ve come a long way in development and now enable driving with no hands on the wheel. Just a phenomenal technology.

Tesla, obviously. They’ve been on a run, doing a great job. Elon Musk is such a savvy guy who really understands what the consumer wants and how to build it to the next level.

General Motors is investing a lot of R&D into electric vehicles and they’re going to continue to do so. Toyota too, starting with the Prius and continuing to invest a ton of R&D. Lexus is also doing a fantastic job.

I think we’re going to see every manufacturer carry their weight with the electric car, and it’s something to watch over these next 10 years.

One of the greatest things to watch will be, who’s going to make the first battery that goes 1000 miles.

I think part of America is still scared of that 300- to 400-mile radius. Once that first battery comes out that will give you 1000 miles on one charge, you’ll see the market boom.

Right now it’s a lot of the West Coast with electric cars. You’re going to see drastically more of them on the East Coast and in the Midwest. They’ll be more on the top of consumers’ lists once the distance and reliability are there, and people feel more comfortable.

Is there anything else you’d like to share about what you learned as a business leader as a human being in 2020?

Where do I begin? I’ve learned more in the last 12 months than in my entire lifetime. There has obviously been a lot of tragedy throughout this pandemic, but it has also given many of us the opportunity to sincerely reflect.

For me it’s been the ability to create balance, to realize you don’t always have to be on the go. You don’t always have to balance 50,000 things to accomplish your goals.

Over the last 10 months, people have spent more time with families. We’re going back to eating dinner together every night. I think that’s something that people almost got away from with technology, cell phones, video games… They consume us. These last nine months have provided an opportunity for us to peel back the onion and get to know who we are as spouses, who are as children, as siblings, as friends.

Sometimes, when you’re going 150 miles an hour in life, you never get the opportunity to turn around and say, Is this right for me? Is this the best choice I’m making?

Everyone’s ultimate goal is to live their best life. Well, what does that mean? It doesn’t always mean more. It doesn’t mean being financially wealthy, having big homes, fancy cars, and designer clothes. What it ultimately means is our health: our physical, mental, and emotional wellbeing. And everything we do—our jobs, our families, our time we have for ourselves—goes into that.

I’m gonna tell you what I told my 10 year old son this morning. I don’t want him to just remember the last ten months. I want him to reflect on what he learned over these ten month that’s going to benefit him for the next eight years, for the rest of his life.

Finally, what are your goals and predictions for 2021?

2021 is for everyone to not just start over but to be their best in every single area of life— to be a better father, son or daughter, a better spouse, a better employee or employer, a better individual. Everyone in the United States and around the world has experienced a tragedy in this pandemic, and I think it’s taught us to be more passionate individuals. So my prediction for 2021 is that we’ll see more passion and compassion in people.

America is the most resilient country there is. We’ll find a way to bounce back. Everyone’s got the tenacity to figure this out. Consider the automotive industry. They went from selling 17 million cars, to a complete standstill, to then completing the greatest year in automotive history. That’s the momentum we’re coming off of right now.

As a whole, we’re going to get out there, become a stronger country, become a stronger culture.

And ultimately we’ll say this has been an experience we’ve learned from.

We’re going to get some good out of this pandemic–and I hate to use the words good and pandemic in the same sentence–but if everyone reflects and says What could I get out of this? … if they focus on the positive and not the negative, then positive things are going to manifest.

People are going to find a way to prosper from this, so my ultimate prediction is that we will bounce back as a country. We will bounce back as an industry. We will bounce back as individuals, as Americans, and worldwide. And we’re going to get through this.

Book Dave Cantin to Take Your Automotive Business to the Next Level

Contact Dave Cantin today to learn more about how his industry expertise and business acumen can help you achieve your goals. With a proven track record of success in the automotive industry, Dave and his team can provide the guidance and support you need to take your business to new heights. Don’t wait – get in touch now and book Dave Cantin to get motivated and start building the future you’ve always envisioned.

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