Inside Automotive with Jim Fitzpatrick, powered by CBT News

Dave Cantin on AutoNation’s Toyota Deal and Dealer Succession Planning

• Jim Fitzpatrick • Season 1 • Episode 51

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As 2025 comes to a close, Dave Cantin, CEO and Chairman of the Dave Cantin Group, joins Inside Automotive to discuss AutoNation’s acquisition of Jerry’s Toyota—its first Toyota deal in more than a decade—and what it signals for dealer succession planning and the future of automotive M&A. Cantin explains why more than half of dealerships remain without a formal succession plan and how that gap can limit optionality when opportunities arise. He outlines why successful transactions require more than top-line pricing, emphasizing preparation, legacy protection, and long-term strategic fit. The conversation also explores broader consolidation trends, buyer and seller behavior heading into 2026, and why mid-sized dealer groups are expected to be especially active. Cantin closes by addressing direct-to-consumer developments and reinforcing the resilience of U.S. dealers amid ongoing industry change.

Key points:

  • AutoNation’s Toyota acquisition and its strategic significance
  • The growing importance of dealership succession planning
  • Shifts in buyer and seller behavior in automotive M&A
  • Consolidation trends among public, private, and mid-sized groups
  • Dealer performance and resilience heading into 2026

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

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SPEAKER_00:

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick:

Hey everyone, Jim Fitzpatrick. Thanks so much for joining us this morning on Inside Automotive right here at CBT News. Jerry's Toyota marks Auto Nation's first Toyota acquisition in more than a decade. As 2025 comes to a close, this deal highlights the ongoing shifts in the automotive retail landscape. Joining us today is Dave Canton. You've seen him here before on CBT News. He's the president and CEO of the Dave Canton Group, which advised the seller on this situation or this transaction, I should say. So he'll share with us, you know, the what the deal represents for the dealer families, planning their next chapter, and what it signals about the broader MA environment as we head into 2026. So, Mr. Dave Canton, thank you so much for once again joining us on the show. I know you are extremely busy uh working deals like this all the time, but I appreciate you giving us some time here. Jim, it's an absolute pleasure to be on as always, and uh it's good to see you as well. Good, good. So, what made Jerry's Toyota such a meaningful opportunity from a succession planning standpoint?

SPEAKER_02:

You know, I go back to saying this all the time, but more than 50% of dealers don't have a succession plan. Right. They just wake up one day and something triggers them to say it's time to sell, or someone knocks on your door or calls their phone and offers them something they can't refuse. But succession planning, why is it so critically important? It's to set your business up for success. And that takes time. It takes time to create the most significant value for your business. So we worked very close with Jerry Toyota, with the entire family, James, and to ensure that this was a multi-generational succession plan. This is something that is more than just one business. This is something that is just more than just this single point automotive dealership. It's it's critically important for a dealer to set the next transactional partner up for success as well, right? This way, when they step aside after decades of work, that that partner, that transitional buyer comes in and they can take right over, understand where the areas are to improve. So we worked very closely with James and family for over probably a year and a half before even bringing this acquisition to market to ensure its ability to be uh an incredible strategic acquisition. And we were excited to see Auto Nation um immediately come to the table to acquire this acquisition. And as the industry is, so were we surprised to learn that it was their first Toyota store to acquire in over a decade.

Jim Fitzpatrick:

Yeah, I when I heard that, I'm like, wow, that uh that's in very in interesting because you would think that they're you know buying these uh every couple of years or so, but that's just not the case with Auto Nation and many of the others. But uh, and of course, Toyota is such an incredible brand. Who doesn't want a Toyota store, right?

SPEAKER_02:

Having seen Jim Toyota Toyota is still the top, it's still the top manufacturer in the industry today. And you can't just go buy a great performing Toyota store. Right. I mean, this would this was one of Minnetland's Baltimore's top performing Toyota dealerships for for decades. Yeah, and it you know, something like this doesn't just come available. So when it does, of course, everyone wants to throw their hat in the ring.

Jim Fitzpatrick:

Sure, sure. When advising sellers, how important is finding the right buyer versus finding just simply a buyer?

SPEAKER_02:

You know, it's it's critically important because when you sell something like Jerry's Toyota, it's not about acquiring or achieving the best price, it's about achieving the actual best transaction. You know, there's employees that have been here for decades that have helped James and his father and everyone build this business into what it is today and what it's going to be in the future. So it's all about the confidence of really understanding that a buyer understands, you know, how incredibly important it is to transition smoothly, to understand what the business needs to evolve and bring resources that maybe the business doesn't have today. So there's so much that goes into partnering the right seller and right buyer together.

Jim Fitzpatrick:

Yeah, for sure. As we close out 2025, how would you describe uh the MA market?

SPEAKER_02:

Yeah. Um, you know, we just got off an MA call this morning internally at DCG, and we have such a robust amount of acquisitions that are that have closed in the month of December, um, a record-breaking amount, and then flowing into January. You know, we're gonna break news in a few weeks of one of the largest highline dealership auto groups that's gonna be closing in the coming weeks. Um, that just all, you know, we couldn't get so many OEMs together um, you know, pre pre-holiday break. So that's gonna fall into the new year. But what we're seeing is so much momentum from Q4 going into Q1 of 26. Um, I think 26 is gonna be one of the biggest years in MA that we've seen in a very long time.

Jim Fitzpatrick:

Really? Wow. Okay, because you guys came off as some incredible years just recently. Um, are sellers approaching the market differently today than they were even a few years ago?

SPEAKER_02:

Sellers and buyers, right? Buyers are so much more forward thinking today. You know, when when when you know, years ago, you know, a seller would provide a few years of financials and you would create an evaluation off of you know a multiple. Today, buyers are so much more strategic, so much more forward thinking. They're looking at things like, well, what can we do in the future? How does the benchmarking really allow us to understand and identify what the business is doing but could do once we once we put our long-term plan into place? So it's a combination of both. Sellers are learning to be more proactive, having a succession plan. So setting their business up for success during a transaction, but buyers, buyers are becoming way more strategic and forward-thinking, utilizing way more resources and really strategic insight that allows them to better position themselves while they're making offers to purchase an acquisition and through post-acquisition to set them up, set themselves up for immediate success.

Jim Fitzpatrick:

Gotcha, gotcha. You've mentioned succession, and I know that your firm helps dealers in that area as well. Talk to us a little bit about that. You don't just help sell or buy dealers uh or help dealers buy stores, but you also help them in the succession planning, right?

SPEAKER_02:

Succession planning is one of the most critical tools of it all, right? Any business in any sector. You know, if you if you if you're not planning for the future, and everyone hears the word succession plan, and they immediately think it means exit, but it doesn't. It means building the right team around you to protect your legacy. You know, we all have different protections in life: life insurance, uh, homeowners insurance, and all these things that we protect our assets. How are we protecting our business? Yeah, part of protecting your business, okay, is having the right team around you of sophisticated individuals, that's a good group of people that you trust around one table that can help you build the best path. And that path could be a handover to the next generation, that path could be to some great executive leadership, or that path could be to an merger and acquisition of a new buyer. And part of what we're planning in that timeline is setting them up to protect their legacy and to build the most value. A lot of what we do is we utilize a lot of our insights from Jump IQ, leveraging that insight to really understand how that business is performing today versus competition. What are the areas of improvement that we can immediately focus on?

Jim Fitzpatrick:

Yeah, yeah, for sure. What types of buyers are most active right now? Is it publics, is it regional companies, is it private, uh smaller groups? Who where do you see the most activity?

SPEAKER_02:

You know, Jim, that's a great question because it's you know, consolidation is at an all-time height. And it's a combination of all of the above.

Jim Fitzpatrick:

Okay.

SPEAKER_02:

The publics are very strategic of where they're positioning themselves. You know, they're really, I would say, more than ever before, really looking at great tuck-in opportunities for their already platform for their already existing platforms. Right. Regional dealerships are now even expanding into new geographic locations, which we're seeing more of today than we have in the past. And then you look at the smaller groups that might have one or two stores that are finally understanding look, we've been doing this a long time. We don't have the runway of that next generation. And are we at a place today that we feel like we are close to reaching a peak to receiving its most value for allowing a public or private to strategically add this as a great tuck in opportunity? And that's where you're seeing a lot of the consolidation come from. So it's it's all of the above, right? It's it's the publics, it's the privates, it's large size, it's small size. You know, the middle size of the pack, if you own 10 to 12 stores, I think we're going to start seeing them significantly add more dealerships over the next 12 to 18 months.

Jim Fitzpatrick:

That's right. That's right. There is some uncertainty uh from an economic standpoint right now in the marketplace. Uh beginning of the year, we talked a lot about tariffs. It's not the top uh item that we're talking about today. It doesn't seem to have had this tremendous negative impact in the auto industry. Uh, it we talked a lot about it in you know, Q1, Q2, but as the year went on and dealers were selling cars and OEMs were absorbing much of that uh that that that money that you know cost them on the on the it it seems it seems as though it's kind of leveled out a little bit. And the dealers that I are that I'm talking to are saying our year was another great year, even in spite of the fact that we were dealing with these tariffs. Have you found that to be the case? And what do you what's your perspective on that?

SPEAKER_02:

Jim, that's a real simple explanation. And I say this all the time, and you know that. The automotive dealers are some of the most resilient, incredible entrepreneurs of any of any sector in any space. And you know, you give an entrepreneur an issue, they're gonna quickly figure out how to overcome that issue. Right. Tariffs was a problem. It is a problem. Not was it is, yes, but you have a group of incredible entrepreneurs, our dealer principals in the automotive industry that understand we have to find ways to overcome these tariffs with the partnership of the manufacturers supporting us. And and guess what? They've done a phenomenal job. It's not a topic of conversation. And dealers, as to your point, are still having a pretty good year. Yeah, okay, coming off of you know what was some of the most historic profitable years over the past few years.

Jim Fitzpatrick:

Um, let me ask you this before I let you go and I appreciate all the time you've given us. Um today we reported here at CBT News, and of course, Automotive News reported it as well. Many of the outlets have reported that Scout just got a dealer's license in Colorado. Now you work with hundreds, if not thousands, of auto executives all over the country, maybe all over the world in your situation. Um what what what's your what's your take on that?

SPEAKER_02:

Wow. Um we'll start by saying that. Wow.

Jim Fitzpatrick:

Exactly.

SPEAKER_02:

Yeah, it's it's it's uh it's definitely creating some uncertainty, right? I think it's creating more of a uh more of a uh untamed situation than dealers want to experience. Um, you know, dealers have earned their right for those for their sales and service agreements um to not have to compete for direct-to-consumer sales. And um, you know, it's definitely an undertaking that is unprecedented and something that is definitely creating an unnecessary amount of stress into an industry that we don't need anymore.

Jim Fitzpatrick:

Yeah.

SPEAKER_02:

So um, where does it go from there? Time will tell. Um I don't I don't see this being exciting news for our entrepreneurs and dealers that work really hard to honor those sales and service agreements, to satisfy their consumers, and to be that middleman between the manufacturer and the consumer.

Jim Fitzpatrick:

Yeah, yeah, for sure. It's it's an unfortunate situation that they felt to go directly to consumers after the millions, if not billions, of dollars invested by Volkswagen and Porsche and Audi stores, and to build that brand. And then to, you know, you gotta get kicked right, you know, where it hurts and uh and say, oh, thanks a lot. We're gonna now create our own Scout brand, or not create, but now sell Scout directly to consumers. It it's uh it stings a lot of people.

SPEAKER_02:

Here's what I'll tell you, and we'll end on this. Um, as I said it before, and I'll say it again. Um the automotive dealers in this in in the continental US, especially are some of the most resilient entrepreneurs in the world. Yeah, and they're gonna figure this out too.

Jim Fitzpatrick:

Right.

SPEAKER_02:

Right? This too shall pass, and they will find a way to overcome this, and they will find a way to still be very successful. And uh the best scenario will work itself out.

Jim Fitzpatrick:

Yeah, I couldn't agree more. Dave Canton, president and CEO of the Dave Canton Group. Thank you so much for all the time you've given us here at CBT News. Very much appreciate it. Love to do a follow-up with you, and I'm gonna hold you to uh the fact that I want to you I want you back on here shortly to tell me about that big transaction. I know it's probably a secret now, but I want you to break it here on CBT.

SPEAKER_02:

A few weeks away, we'll break it. We'll give you all the insight. And a few other, a few more weeks after that, we'll see you at NADA, where we're hosting our seventh annual NADA uh event, this year's 1,500 per person events with some of the most iconic, epic names performing in the industry. It's gonna be Las Vegas, it's gonna be one of Las Vegas' biggest events ever. Right. And we're so excited that we're hosting it.

Jim Fitzpatrick:

Yeah, we're showing the the uh the marketing that you've put out on the screen right now, and man, this thing should be really, really great. So congratulations. We're excited.

SPEAKER_02:

I mean, look, every year I say I'm gonna go bigger. Nobody thought they met 1,500 people bigger. So let's see what happens.

Jim Fitzpatrick:

Yeah, I'm thinking next year and next time we go to Vegas, we're gonna see your face on the sphere. You know what I mean? And then it'll be you'll have to fill that up. But my god, that's that's that's awesome. That's awesome.

SPEAKER_02:

So Jim, thank you for your time today and everything you do for the inch. Thank you so much. Really appreciate it.

SPEAKER_00:

Thanks for watching Inside Automotive with Jim Fitzpatrick.