Small, single-point stores have some big advantages

Our report on the rapid pace of dealership consolidation in last week's issue noted that large private and public groups, as well as auto industry newcomers, are sitting on mounds of cash and are eager to acquire stores.

Buy-sell activity is up, and in the process dealership groups are getting bigger. That's a clear industry trend, but where does it leave small, single-point stores, the ones that don't want to exit the auto business?

Size matters -- a lot. But single-point dealerships that keep abreast of marketing trends, such as social media, excel in customer service and know how to contain costs aren't going away.

Small stores have advantages, too: fewer layers of management, no public financial reporting requirements, no private jets, etc. Plus, many are family-owned stores that are already paid for.

Each week, Automotive News features a "best practices" dealership. Many featured stores thrive on the strength of customer service, cost containment and entrepreneurial competence. And many of those businesses are small, single-point stores.

The fact that so many rich and powerful firms and families from outside the industry are chasing auto retailing opportunities is a sure sign that business is good -- and that it is a good business.

But it is a good business for single-point dealers, too.