Potential is high for a significant dealership buy-sell wave in Quebec

Sylvie Gagnon, formerly a director within the automotive finance arm of Scotiabank, has joined the buy-sell advisory firm Templeton Marsh as director of sales for Quebec during what she sees as an impending wave of dealership mergers and acquisitions in the province.

Consolidation “didn’t come as quickly” for Quebec as it did for the rest of Canada, Gagnon said. But as new buyers enter the province and single dealerships or small groups weigh their future, she anticipates at least five busy years as some groups bulk up and others exit the business.

“The team that has three, four, five [dealerships], they are really asking themselves: ‘We have two options: We increase up to 15, or we sell.’”

Gagnon said her decision to leave Scotiabank was a difficult one. She spent 16 years there, the most recent eight as director of sales and market lead for Quebec with the Scotiabank dealer finance centre. In that role, she oversaw teams on the retail and commercial sides of the business, backing dealers with financing for transactions such as dealership acquisitions and real estate purchases. She also built a detailed picture of the dealership landscape in Quebec during annual tours of the province in the years before the pandemic. Before joining Scotiabank in 2006, Gagnon worked at Ford Credit for about 15 years.

Though Gagnon, 55, had been planning an early retirement from the bank in two or three years, her intention was always to use the connections she had built over her more than 30-year career to find a new role in the industry.

The current state of the dealership market in Quebec — and a timely call from Templeton Marsh Managing Partner Samir Akhavan — encouraged her to accelerate her plans.

• Read about all the latest Canadian dealership transactions here.

“I truly believe that [consolidation] is happening now in Quebec,” Gagnon said. Waiting even two years to jump into the buy-sell market would have put her behind, she said.

A HELPING HAND TO EXPAND

Adding Gagnon to the team at Toronto-based Templeton Marsh will help the company “significantly expand” its footprint in the province, Akhavan said.

Jean-Luc Rousseau, who was previously senior principal for Quebec at Templeton Marsh, is no longer with the company, Akhavan said.

Akhavan also expects dealership consolidation in Canada to continue apace, with Quebec being no exception. He pointed to the aging dealer body and arunof14orso“very good years” since the 2008 financial crisis as two key reasons that many dealers are considering selling.

The next five years look like far less of a sure thing, Akhavan said.

“Changes in the geopolitical dynamics of the world, inflation, electric cars, interest rates, thea gency model that the OEMs are looking at, the prohibitive cost of real estate — it’s just all sorts of things that are now leading to potentially a perfect storm.”

Relatively small Canadian dealership groups are staring down these challenges, Akhavan said, and choosing between the greater stability that comes from adding rooftops — or the exit.

“You’ll always find a dealer group that’s got five or six stores that’s going to buy, and then another one that says: ‘Yeah, you know what, I don’t want to do this. I’m going to sell.’ ”

Gagnon will focus nearly exclusively on business development as part of the Templeton Marsh team, Akhavan said.