AutoNation and Lithia’s race to dominate the auto dealership industry

Auto dealerships have been mom and pop organizations for significantly of their existence. But the field is bit by bit consolidating.

6 publicly traded dealership groups — AutoNation, Lithia Motors, Team 1 Automotive, Sonic Automotive, Penske, and Asbury Automotive Group — have been on a shopping spree in new many years, buying up a small but developing share of dealerships. And they’ve been wildly successful.

Instances have been specifically constructive in the past couple of years. New auto prices have strike file highs with areas in limited source and automobiles in large desire, specially for People who moved to suburban parts all through the Covid-19 pandemic and needed their own automobiles for their most important method of transportation.

The trials of the pandemic also forced sellers to develop into a lot much more economical. As a final result, sellers have been raking in increased earnings on each individual device offered.

Providers these as the two major firms, AutoNation and Lithia Motors, have been, respectively, acquiring again massive quantities of stock and investing into additional acquisitions and other firms, these kinds of as on the web retail architecture.

But they could encounter a difficult, uphill climb ahead. Buyers are receiving progressively pissed off by the dealers’ high sticker selling prices and there are other acquiring options: popular auto manufacturers these as Tesla, Rivian and other individuals are promoting automobiles immediate to the client and more motorists are getting cars and trucks on-line.

But these publicly traded groups do have a whole lot of chance to grow additional inspite of these factors. Now, they only regulate a modest share of the market of much more than 16,000 dealerships.

View the online video to find out more.