Republic Industries Inc. last week picked up one of the nation's largest and most venerable dealer groups and plucked another dealer away from rival Driver's Mart. In the process, Republic set itself up for more battles with Honda and Toyota.
The deal to buy Dobbs Automotive Group marks Republic's largest since January, when it bought Maroone Automotive in Pembroke Pines, Fla. The Memphis-based Dobbs group owns 20 dealerships. Republic has agreed to pay $200 million in common stock for it, as it did with the Maroone chain.
During the 1950s, the Dobbs group foreshadowed Republic by buying so many Ford dealerships that the automaker became concerned. (See story below.) Republic also acquired the Anderson Dealership Group in Menlo Park, Calif., for $40 million in common stock. Anderson held the San Francisco Bay Area territory for Driver's Mart, a growing chain of used-car superstores. (See story below.) Driver's Mart officials said they could replace Anderson.
The two deals are likely to heighten the conflicts between Republic and the Honda and Toyota sales arms. The Dobbs chain includes five Honda stores, four Toyota and two Lexus. Anderson has a Honda and a Lexus franchise.
American Honda Motor Co. and Toyota Motor Sales U.S.A. Inc. have been actively trying to stop Republic's acquisition spree. The companies fear Republic is buying dealerships too fast and lacks sufficient overall management experience. Toyota has been suing Republic state-by-state, while Honda has brought suit in federal court in Los Angeles.
John Dobbs, CEO of Dobbs, said he believes Honda and Toyota will reach an understanding with Republic. Dobbs, 56, will remain in charge of the dealerships once they merge with Republic.
John Anderson, 50, president of the Anderson group, said he believes his Honda and Lexus dealerships will continue to enjoy normal relations with the sales organizations despite the war of words between parent companies.
In another move, Republic voluntarily withdrew a lawsuit against Toyota in Texas and said that it will drop a counterclaim against Toyota before the Texas Motor Vehicle Board.
Republic's lawsuit sought to change Toyota's decision to withhold its consent in the transfer of a Toyota franchise from Joe Myers Toyota of Houston to Republic. Republic now believes the suit is redundant because of a new Texas law.
Republic spokesman Jim Donahue said Republic is optimistic it can reach a settlement with Honda and Toyota.
