Dealer Groups Continue Record Growth

Dealer groups on the Ward's Megadealer 100 reported total revenues of $123.8 billion in 2004 – up from $116.6 billion in 2003 and a considerable jump from $89 billion in 1999.

Moderately-paced acquisition strategies for the dealer groups, which have increased their dealership totals from 1,596 in 1999 to 2,078 in 2004, have fueled the revenue explosion.

The megadealers added 91 stores in 2004, led by Group 1 Automotive Inc.'s (ranked 5th) acquisition of 20 stores. The public groups expect to keep adding stores and revenues in 2005. United Auto Group CEO Roger Penske says the company will add $300 million in revenue this year with acquisitions.

Consolidation is not the only reason revenues are increasing. The Ward's Megadealer 100, which has ranked the top 100 dealer groups by total revenues for 18 years, reveals that individual dealerships are creating more revenue. In 1999, average revenue per store was $55 million, rising to $59.6 million last year – up from $58.7 million in 2003.

Revenues from new-vehicle sales, finance and insurance departments and fixed operations each exceeded 2003 totals by more than $1.5 billion in 2004.

Despite record revenues, share of 2004 new-vehicle sales for the top 100 automotive dealer groups remained even with 2003 at 16.6%, according to data from the rankings.

Although their share of the new-vehicle market did not change, megadealers on the list did increase their new-vehicle sales by almost 30,000 units compared with 2003. Sales of new vehicles for the leading groups have stayed relatively consistent since 1999, hovering between 2.4 million and 2.8 million.

Dealers on the ranking expect the growth to continue. Cornelius Martin, ranked 86th this year, says he has another 10 strong years left and is looking to increase his presence in fast-growing markets.

Meanwhile, Michigan dealer Joseph Serra, whose Serra Organization is ranked 34th with more than $700 million in revenue, is adding three franchises and two new facilities this year.

[email protected]