Consolidation No Threat
The take away here is that there is always talk of public companies spurring industry consolidation, but they never really approach the level of posing a significant threat to others in the industry.
The publics control a combined 5% of all dealerships in the U.S., and while they will continue to grow, the real consolidation will continue to occur with the dealer groups south of No.10.
For some megagroups, their ascent will be the result of growing existing operations. For others, it will be fueled by acquisitions.
Back in the day, when publicly owned dealerships were relatively new operations and faced a lot of skeptics and scorn, the joke was that if one of them operated a good store, it was due to acquiring a great store.
A megadealer may be cataloged by its total revenues, but it’s the quality of those revenues that sets dealer groups apart.
Phil Villegas is a principal at Axiom Advisors, a boutique automotive dealership consulting firm specializing in mergers & acquisitions, enterprise management and litigation support. He can be reached at PV@AXIOM-AUTO.COM or 786-472-2800.