I am in Beijing, part of a multi-city trip to do interviews for a report I am writing on China’s EV industry for another publication. January passenger vehicle sales fell 18 percent, the seventh straight month of declines. The EV sector was the only bright spot in the January passenger car sales market in China. Electric vehicle sales rose 138 percent on-year to 75,000 units, still a tiny part of the market but fast-growing. I met with the president of a luxury car dealership group today and he figures the market slide is nothing to be worried about. Markets fluctuate, he said.
He also figures that the established automakers will, in the end, be the winners in China’s electric vehicle sector. The startups are pouring a lot of money into developing products, he said, but they have few or no products on the market yet. Meanwhile, the established automakers are all entering the market now, and they will do so with multiple products. He may be right.
This week’s issue has a bit of a due diligence theme. Juan Pena of MBAF is here with a look at how to avoid fraudulent numbers during the M&A process. He recommends doing a deep due diligence looking for red flags such as using one or more rental car companies owned by the dealership group to “punch” cars.
Also this week, DHG Dealerships offers tips on seller due diligence. Be prepared to discuss any hidden liabilities, for example. Doing a thorough seller-side due diligence can help you get maximum value for your dealership, says John Seymour.
Then there is Transaction News.