Since they sell almost 8% of all vehicles sold in the United States, one might expect the 14th annual Ward's Dealer Business 500 dealerships to be a pretty accurate barometer of the automotive retail industry.

And they sure are.

In 1999, the overall retail market increased from 15.54 million units in 1998 to 16.89 million. The Top 500 sold 1.366 million units last year, compared to 1.334 million the previous year.

Used-vehicle sales among the Top 500 also increased, from 783,846 in 1998 to 791,527 in 1999. Their total revenue was once again over the $50 billion mark.

"Sales are up and times are good," says David E. Cole, executive director of the University of Michigan's Office for the Study of Automotive Transportation. "The market continues to be strong.

"The largest guys are figuring it out," continues Mr. Cole. They're figuring out how to use e-technology. They're adjusting to the new economy."

The 2000 Top 500 list is further proof that size is crucial to success in today's automotive retail environment, says James A. Mateyka, vice president of A.T. Kearney's automotive consulting practice.

"There is a cont-inuing trend toward larger dealers and consolidation, but it's slowed down a lot," says Mr. Mateyka. "If things turn down, that would re-accelerate the consolidators."

"What seems to separate the top guys is the advantage of the bigger dealers. The probability of profitability is much greater at 750 units or more. There are economies of scale."

No one in the Top 500 is much below the 900-new-unit threshold.

"Another factor that separates the elite from the rest of the pack is the ability of the best dealerships to attract, train and keep high-quality employees," says Mr. Mateyka. "Human resources is the key."

He says that the information in the Top 500 should send a message to automakers, which seem to want to take some measure of control over the retail process.

"There are some really good entre-preneurial dealers out there that are committed to the business, are innovative and can make things happen," says Mr. Mateyka.

Leading the list of dealerships that make things happen is Ricart Ford in Columbus, OH, which again is the biggest of the big with 24,774 new and used units and a total of $469 million in total revenue. Ricart increased from 20,167 total units and $382 million in revenue a year ago.

Galpin Ford in North Hills, CA is in second place for the second consecutive year with 15,217 total units and $394.9 million in total revenue. Last year, the Galpin operation sold 14,729 units and took in $366.8 million.

AutoNation's Brown & Brown Chevrolet of Mesa, AZ is in the third position with 10,236 total units and $310.1 million in total revenue. In last year's report, Brown & Brown sold 9,772 units and collected $282.6 million in revenue.

Moving from fifth place into fourth is Houston, TX's Landmark Chevrolet. Landmark sold 12,258 total units and had $277.8 million in revenue. In 1998, Landmark sold 11,402 units and brought in $253.9 million.

Making a significant jump - from 10th place last year to 5th - place this year, is Fletcher Jones Motorcars of Newport Beach, CA. The top Mercedes-Benz dealership in the country sold 12,478 units for a total of $274.3 million.

"It's incredible," says Garth Blumenthal, general manager of Fletcher Jones Motorcars. "(Placing fifth) is a huge morale boost. It's good for our people to see that all of their hard work is paying off. And a lot of our sales and marketing has to do with the number-one Mercedes-Benz position."

Rounding out the top six is Norm Reeves Honda of Cerritos, CA, with 12,478 units sold and $274.3 million in total revenue.

This year's No.500 is Jim Burke Motors of Birmingham, AL with $61.1 million in revenue.

"Guys down at that end are still private capital businesses," says Mr. Mateyka, explaining that they may not have as ready access to finances for land acquisition and physical plant expansion as some of the larger dealerships that have giant public corporations behind them.

Other highlights from the 2000 Top 500 include:

* Prestige Ford of Garland, TX, owned by Ford Dealer Council President Jerry Reynolds, catapults from No. 32 to No, 7.

* Bill Heard Chevrolet of Sugar Land, TX, checks in at No. 11, up from No. 23.

* Newcomer Ray Catena Motor Car of Edison, NJ, debuts at No. 18 with total revenue of $205.9 million.

* After a year off the list, Jerome Duncan Ford of Sterling Heights, MI, returns at No. 20.

* Universal City Nissan of Los Angeles, CA, moved from No. 65 to No. 23 this year.

(A record seven women-owned dealerships made the list: Jerome Duncan Ford, Sterling Heights, MI, Gail M. Duncan, principal; Atlanta Classic Cars (Mercedes-Benz), Decatur, GA, Anna C. Ellis; Hilcher Ford, Arlington, TX, Larryssa Hilcher; Koons of Manassas, Manassas, VA, Joyce C. Koons; W.I. Simonson (Mercedes-Benz/Saab), Santa Monica, CA, Mary Rehwald; Bob Ross Buick-GMC-Mercedes, Centerville, OH, Norma J. Ross, and Courtesy Chevrolet, San Jose, CA, Rebecca Roulette. Meanwhile, sales continue to go through the roof.

"The only question is how sustainable is it?" asks U-M's Mr. Cole.

Mr. Mateyka says several factors could hamper auto sales for the remainder of the year.

"Gas prices are up, interest rates are up and orders are softening in the heavy-duty truck market, one of the leading early economic indicators," he says.