There may be a limit to how many public dealership groups Wall Street will support - and some analysts think the industry could be near the saturation point.
Just how long it takes to reach that point depends on how well dealer stocks perform and the pace of acquisitions.
Public dealer groups must grow fast enough to keep investors happy, and the there is a finite number of good dealerships available is limited.
'There could be room for 12 to 15 public dealer groups in the foreseeable future,' says Sheldon Sandler, president of Bel Air Partners of Princeton, N.J., an investment firm that serves dealers.
'Generally, what happens is that if investors are making money (on a stock category), you will typically find me-too candidates,' Sandler says.
'Some of them will fall by the wayside. Within five or six years, the big guys start to gobble up the small guys.'
Currently, there are 10 public new-car dealership groups, counting Budget Car Sales Inc., the subsidiary of rental-car company Budget Group Inc. that just bought three new-car dealerships.
Two more - Hometown Auto Retailers Inc. of Watertown, Conn., and Sunbelt Automotive Group Inc. of Atlanta - have filed registration statements with the federal government for initial public offerings.
Three more big players - Asbury Automotive Group of Conshohocken, Pa.; Hendrick Automotive Group of Charlotte, N.C., and Planet Automotive of Miami - have indicated that they might go public within a few years.
Sandler points out that some of the public chains are still relatively small and have fairly slow growth strategies.
And Ursula Moran, an analyst with Sanford C. Bernstein, a New York investment firm, says there is likely to be room for two or three giants such as Republic Industries in a field of perhaps 20 chains.
Depressed stock prices, especially for Republic, the nation's largest dealership group, have kept some companies out of the market.
Says Moran: 'Because disappointments have dominated, the investment community is not chanting, 'Give us more! Give us more!''