By on April 4, 2022

If you frequent this website, there’s a good chance you’ve seen an article discussing how smaller car dealerships are being incorporated into larger entities over the last few years. As with most other industries, the trend has been accelerating and Automotive News just shared the metrics showing how far we’ve come over the last decade. According to the report, consolidation among mega dealers has made heaps of progress of late and should continue on with their mission of never-ending growth because none of them want to become the little guy after every pint-sized showroom has been bought up in North America. 

“With the consolidation that’s happening across all of the large major automotive groups, we want to make sure that we are keeping up pace,” Liza Borches, CEO of the Carter Myers Automotive Group in Charlottesville, VA, explained to the outlet after her company’s buyout of Miller Auto Group raised its profile on Automotive News‘ top 150 dealer groups currently operating in the United States.

While 2021 may not have been the biggest year for automotive sales in terms of pure volume, America’s largest dealer groups enjoyed record profits and the widespread buyup of their less financially robust competitors.

From AN:

The top 10 and the top 150 groups now own more of the industry’s dealerships and are responsible for a larger share of the industry’s new-vehicle sales.

Dealers who want to be competitive in the long term are realizing it’s time to “get big or get out,” said Alan Haig, president of Haig Partners, a buy-sell firm in Fort Lauderdale, Fla. For the first time in many years, all six of the main public dealership groups are acquiring stores, he said.

“The consolidators have capital,” Haig told Automotive News. “They have confidence, they have support of their shareholders. They’re going to continue to do deals.”

The top 150 groups in the U.S. owned 4,138 stores, including a small but undetermined number of used-only and non-U.S. outlets, at the end of 2021, according to the Automotive News Research & Data Center, which compiles the list. That equates to 22.7 percent of Automotive News’ total count of franchised dealerships in the U.S., up from 21.1 percent for 2020 and 13.9 percent for 2011. The top 10 groups owned 1,565 stores at the end of 2021, an 8.6 percent share of all U.S. dealerships and up from 7.1 percent for 2020 and 5.3 percent for 2011.

That’s a lot of headway in such a short time and everyone seems to be convinced that the buyouts will continue until the AutoNations and Penskes of the world hold onto the lion’s share of the market. But this isn’t even a complete data set, with several of the largest dealer groups opting against furnishing the relevant information or beholden to a reporting schedule that was at odds with the study. AN confirmed this by suggesting the figures “actually understate the share of industry sales commanded by the top 10 and top 150” businesses in its reporting.

“Dealership groups report only the sales they recorded during the year — but not sales made by an acquisition target before a transaction being finalized,” the outlet explained. “That means the vehicle sales recorded by acquired groups before transaction completion dates go unrepresented on the list.”

In some instances all this did was shift around the placement of which auto groups happened to be the biggest dog in the yard. But it also helps obfuscate just how massive some of these mega dealerships are becoming. Though we do have a good idea of which stores grew the most in 2021 — Asbury Automotive Group reportedly nabbed 71 showrooms last year, followed by Lithia Motors’ 69 new stores. Meanwhile Sonic Automotive added 56, Group 1 Automotive acquired 35 lots, Penske Motor Group got 27, and AutoNation scooped up 21.

With even some of the midsized groups vying to grow, lest they be destroyed by their larger competitors, nobody expects this trend to cool off. Corporate consolidation has also accelerated over the last few years, with pandemic restrictions making times tougher for smaller dealerships (among other businesses) despite the relief funds that were earmarked to ensure something like this wouldn’t happen. If anything, the industry seems to expect dealer buyouts to increase through 2022.

“We’re gonna see a continued acceleration in consolidation and then the normal sort of changing hands of targets that aren’t really the typical consolidators,” suggested Mark Johnson, president of buy-sell firm MD Johnson in Enumclaw, WA.

[Images: LM Photos/Shutterstock; Automotive News]

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22 Comments on “Mega Dealerships Continue Consolidating Strength...”


  • avatar
    SCE to AUX

    Same with banks, grocery stores, hardware stores, appliance stores, small tech/manufacturing, etc.

    The economies of scale are hard to ignore, but it’s also driven by the owners of the small businesses looking for a golden parachute through a buyout.

  • avatar
    theflyersfan

    Side topic but one that this article jogged my memory. I wish more cities would do what Southern California, and especially the LA area, has done, and consolidate all of the new car dealers in one area per region. I remember hopping off of the 101 at Thousand Oaks and unless it was an exotic (there’s Beverly Hills and parts of Orange County for that), pretty much all of the major carmakers were represented there. If you were considering several cars, you didn’t have to spend a day going all over the place in hellish traffic. Just head down one road and comparison shop all day.

    I think if this ongoing shortage and lack of inventory drags on until 2024 (that’s what I’ve been reading as a possible “things get back to normal” year), the mega dealers are the only ones going to survive this. The small parking lot dealers that sell 150,000 mile BHPH type of cars might make it by sifting through the auctions that the mega dealers might not touch, but the larger dealers just have the buying power and resources to snag the best cars and offer a decent amount for a trade. But if you’re a medium sized used car dealer – the type that little league kids have sponsored on their uniforms and one local channel uses as their weather sponsor, and have been in business since 1960 and have ties to the community but have not evolved and gotten larger…I doubt the future looks good for them. They are going to be boxed out of the better cars by the mega dealers. Heck, in the Louisville, we all know the family names and how they run pretty much all of the new car lots here – family names like Wyler, Swope, Bachman, Huffman. Odds are that your next new car in this region is coming from one of them.

  • avatar
    cimarron typeR

    You can add hospitals to the list.
    For cars, though I’ve personally avoided buying from a corporate chain all things more or less equal. The local stores tend to be more involved in the community , like the Corolla raffle at high school type deal, or donate cars for drivers ed back in the day. But there have to be more than one dealer per brand to have this option though.

    • 0 avatar
      3SpeedAutomatic

      Yep on the hospitals. Again, its economy of scale when negotiating with insurance carriers. Each independent or speciality hospital in my area has been gobbled up via affiliation or complete buy out.

      Same thing happening in rural areas. One large regional sucks up all the small (<75 bed) hospitals in a 100 mile radius. All major surgeries done at the hub while local hospital moved to clinic status. With so many baby boomers hitting the 65 mark, the chain knows it will get some type of reimbursement via Medicare. And don't get me started on Medicare Advantage, what a nightmare!!

  • avatar
    Glenn Mercer

    Some nuance around this trend. First, note that the number of actual stores hasn’t changed… in fact, has slightly increased. OWNERSHIP is consolidating, but not the number of outlets. Conventional wisdom X years ago is that we’d need fewer stores, since “the Internet” allows shopping at a distance. Second, the size of the average store has grown so much that “the little guy” is actually pretty big by now: the National Auto Dealers Association reports that the AVERAGE store among those 18,000 has $60 million in revenue.

  • avatar
    Jeff S

    One of the last independent Ford dealers near me is for sale. Family run since 1960 but the family no longer wants to run it. Probably one of the big local franchises like Steve Castrucci will buy it. Don’t think Wyler owns any Ford dealers but maybe they would be interested.

    • 0 avatar
      bullnuke

      Wyler owns the Chrysler/Dodge/Ram, Kia, Hyundai, and Chevrolet store up near me. All but the Chevrolet store is under one roof. My daughter is a sales rep for them and says that Wyler unconventionally treats the associates very well (high praise from a woman who has worked for some miserable people over the last 20+ years).

    • 0 avatar
      Lou_BC

      @Jeff S – That’s the problem with lax antitrust laws. Big chains gobble up smaller companies. They gain market share and kill competition with minimal risk.

      A publicly traded chain owns 3 dealerships in my town. They couldn’t buy the Ford, Chevy or Toyota dealerships because their franchise agreements forbid selling to a publicly traded entity. The CEO of that outfit started a separate chain and bought the Ford and Toyota dealership and many others in Western Canada. He’s currently in hot water and being sued by the public chain for his purchases.

      My son works for a Dad and son “chain” who own a Kia, Stelantis, and GM dealer. Nothing big, just small town stuff. The GM dealership is owned by a fellow who’s family own multiple dealerships.

  • avatar
    dal20402

    Time to return to the pre-Carter concept of antitrust. There’s more than just consumer prices to consider when businesses consolidate.

    I had an infuriating experience today trying to cancel AT&T TV service. They incorrectly sent me a bill for a period when my service was supposed to have been suspended. The computer would not let me reach a human, through any channel, until I paid the bill. Once I finally gave up and paid it, I was told there was no possibility of a refund. They stole $200 of my money for service I never got, and told me straight up front that I’d have to take them to court (costing many thousands) to get it back. A company with less market power would not have tried that trick, but they knew perfectly well that it wouldn’t hurt them one bit.

    • 0 avatar
      Art Vandelay

      I’ll take things that never happened for 400 please Alex.

      Yawn…they don’t exist to ensure the poors can afford a new car.

      What’s the ATP on a Tesla vs traditional dealers on models in the same class? Yeah, that’s what I thought. Sometimes prices go up and on rare occasions, politicians do exactly what they promise. Enjoy.

    • 0 avatar
      28-Cars-Later

      Agreed, the last major case I am aware of which was pursued was that against Microsoft in 2001.

    • 0 avatar
      FreedMike

      @dal:

      To hell with AT&T – they f**ked me on my Iphone trade in. I brought the old one back to the store – which the store manager said was just fine – versus mailing it in. Charged me $400 for the old phone because it (supposedly) never made it back. Stupid me trusted the guy at the store…who, of course, is no longer there. Twenty bucks says he took the phone and sold it himself.

      I’d say “I’m going with someone else next time” but this is how all these a**holes operate.

      • 0 avatar
        28-Cars-Later

        F*** AT&T, former Cricket customer for 19 years. T-mobile’s service kind of sucks sometimes where I live but their customer service is unbelievably good. I meant to the point where they essentially created a custom plan for me after numerous unrelated calls to keep me happy as a new customer.

        • 0 avatar
          FreedMike

          Meanwhile, calls to AT&T “customer service” – i.e., someone in Mumbai whose English is so bad that he can barely rattle off what’s on his script – have predictably yielded zero results.

          I’m gone from AT&T as soon as I can figure out how to make it happen. I might just buy the damn phone and take it somewhere else for service at this point.

        • 0 avatar
          dal20402

          My family has 5 lines and 4 other connected devices on T-Mobile. They haven’t been perfect for us but they’ve never done anything remotely as egregious as blocking me from any reasonable method of disputing or questioning a bill unless I pay it first.

      • 0 avatar
        dal20402

        I’ve had issues with both T-Mobile and Verizon but been able to resolve them. The only other telecom company that’s done anything to me that I’d put in the outright scam category is Comcast.

        (And of course right now I’m living in a rental that has no options for internet service other than Comcast, so I’m having to give them money. I hate every minute of it, but especially the minutes when my “35Mb upload” internet service can’t sustain a 2Mb/s Zoom call.)

  • avatar
    ToolGuy

    Look for Tesla to introduce franchise dealerships soon. (The advantage that traditional dealers offer to legacy OEMs is too big to ignore.)

  • avatar
    Jeff S

    Why would Tesla change from direct buying to franchise dealerships when direct sales has worked so well that Ford is even considering it for sales of their EVs. With the huge markups above MSRP that many dealers are doing many consumers will start demanding a better buying experience. As for selling a vehicle to a big franchise dealer you are better off selling it to Carvana or Car Max. Big franchise dealers want to chisel you for every dollar. I would rather cut the dealer out entirely and buy direct from the manufacturer. Most dealers treat the buyer like an idiot and most sales people know less about what they are selling than many customers but they use the same dishonest underhanded tactics that have gotten them the scummy reputation they deserve. There might be some good dealers out there but most are not and many buyers dread wasting hours at a dealership which play games at the buyers expense. I feel like taking a shower every time I have to deal with the sales and finance people at a dealership. Most are scumbags.

  • avatar
    28-Cars-Later

    I likes me some data but this has been happening for several years prior to 2020.

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