In a move to refocus its efforts on the Canadian market, AutoCanada Inc. announced plans to divest 17 of its U.S. dealerships for $82.7 million. The decision comes after a challenging foray into the American automotive sector, which has been exacerbated by tariffs imposed during the Trump administration. With this sale, AutoCanada aims to reduce debt and concentrate its efforts on expanding its footprint within Canada, where it currently operates 64 dealerships and 29 collision centers.
Difficult Beginnings in the U.S. Market
AutoCanada entered the U.S. market in 2018, acquiring eight dealerships and an auto mall for $86 million. However, the company struggled to establish itself in the highly competitive American automotive landscape.
Paul Antony, AutoCanada’s executive chairman, explained that the U.S. acquisition did not align with the company’s long-term vision. "This acquisition was more or less kind of an acquisition gone wrong, and it put the company in jeopardy," Antony said in an interview with BNN Bloomberg.
Despite efforts to restructure its operations, AutoCanada found the infrastructure and relationships needed to succeed in both the Canadian and U.S. markets were not properly established. Antony emphasized the company’s primary focus moving forward would be on leveraging its strengths in Canada, where it has deeper roots and a more solid market presence.
Financial Overview and the Impact of U.S. Tariffs
The sale of the U.S. dealerships includes locations such as Autohaus of Peoria and Bloomington Normal Automall in Illinois. These dealerships sold 15 different brands, including Audi, BMW, Subaru, Volkswagen and Mercedes-Benz, with approximately 12,900 vehicles sold in 2024. The company reported a revenue of $1.24 billion in its first quarter, showing a year-over-year increase of $28.1 million. However, it also posted a net loss of $3.2 million for the period, with a loss from discontinued operations of $12.9 million.
The decision to exit the U.S. market aligns with challenges faced by the automotive industry, including the impact of tariffs on imported vehicles and parts. The Trump administration’s tariffs on car imports to the U.S. have raised prices for both vehicles and their components, complicating the operations of dealerships that rely on cross-border trade. Antony pointed out that tariffs are largely beyond the company’s control, and instead, AutoCanada is focusing on factors it can influence — chiefly customer experience and local market dynamics.
“We found the right buyer at the right time for the right money,” Antony said. “By selling the U.S. businesses, we are positioning ourselves to pay down debt and sharpen our focus on the Canadian market.”
AutoCanada’s reallocation of resources to its Canadian operations is expected to provide a more streamlined and profitable path forward. With the reduction in its U.S. exposure, the company can now concentrate on its core Canadian market, where it is better positioned to compete and grow.
