Add Row 
Add 
Ares Management Eyes Expansion into Auto Finance
As more automotive dealers navigate a challenging market characterized by rising vehicle prices and shifting consumer behaviors, Ares Management Corp. is looking to buy auto finance paper to further enhance its portfolio. This move comes in response to an increased demand for flexible financing solutions amidst changing dynamics in the auto industry, where consumers are expected to hold onto their vehicles longer.
The Rise of Automotive Financing
The necessity for reliable financing solutions for auto dealers has never been higher, as inflation and inventory shortages threaten to impede sales. According to recent studies, automotive retailers have always been a staple in the net lease investment market. They are pivoting towards servicing more established customers, especially given the economic constraints consumers now face.
Recent Market Trends Impacting Ares
Rising prices for both new and used vehicles have led consumers to reconsider their purchasing behavior, preferring to maintain their existing cars rather than invest in new ones. This change has resulted in a significant uptick in demand for automotive services. Lanie Beck from Northmarq notes that net lease investors will find abundant opportunities in this evolving landscape, with successful brands aggressively moving to expand their service offerings.
Ares’s Strategic Moves
Ares’ acquisition strategy is notably aggressive. The company's most recent $3.8 billion acquisition of Capital Automotive highlights its focus on integrating flexible net lease solutions into its investment strategy. Last year alone, Ares has secured over $7.2 billion in investments, indicating a deep commitment to maximizing returns through diversified asset profiles, including their extensive portfolio of over 250 essential real estate assets structured as long-term leases.
Looking Ahead: The Future of Auto Financing
With consumer behavior gradually shifting and the significant impact of inflation on auto sales, the demand for financing options that are adaptable is anticipated to grow. Ares is well-positioned to meet this demand as it marries its credit and real estate capabilities to tap into this lucrative opportunity.
Value for Dealers: Adapting to Change
For dealership principals, general managers (GMs), and fixed operations directors, understanding the evolving landscape of auto finance is crucial. As Ares looks to invest more in the sector, dealerships can find themselves benefiting from enhanced financing options, bringing potential growth to their operations amid market uncertainties.
Ares is not just a lender; they are looking to create partnerships that can fuel long-term growth in the automotive sector. As they expand their offerings to auto businesses, dealers should seize the opportunity to build collaborative relationships that support sustained success in a rapidly changing market.
Write A Comment