Aggressive consolidation has rocked the ranking of the nation's largest dealership groups.
Large consolidators are being gobbled up by larger consolidators with 3-year-old AutoNation Inc., formerly known as Republic Industries Inc., having the largest appetite.
AutoNation, the nation's No. 1 dealership chain, doubled its size as it grew from 111 dealerships in 1997 to 223 in 1998. AutoNation sold 286,179 new vehicles and racked up $13.5 billion in revenue in 1998.
The 10 biggest dealership groups retailed 4.6 percent of the new cars and light trucks sold in 1998 compared with 3.6 percent in 1997. By itself, AutoNation delivered 1.8 percent of those vehicles in 1998.
Companies on Automotive News' list of the top 100 dealership groups delivered 11.1 percent of all new vehicles sold in the United States. That amounts to 1,735,148 of the 15.6 million cars and trucks sold last year. The group of 100 accounted for 10.2 percent of all sales in 1997.
In 1996, the top 100 dealership groups accounted for 5.8 percent of all sales. That was before the buying spree brought about by public companies and consolidation was in full swing. In 1996, older, family-owned companies held the top spots.
As recently as 1995 the top three dealership groups were:
1. Hendrick Automotive Group of Charlotte, N.C.
2. Planet Automotive of Coral Gables, Fla., formerly known as Potamkin Cos.
3. V.T. Inc. of Shawnee Mission, Kan., which is owned by the Van Tuyl family.
Those companies are still around but have been pushed farther down the list. In 1998, V.T. was fourth, Hendrick was fifth and Planet was eighth.
Last year, two new dealership groups muscled their way into the top 10, and 17 groups are new to the list of 100.
The list ranks the groups by 1998 retail unit sales of new vehicles.
While four of the top 10 dealership groups in 1998 were closely watched, publicly traded companies, privately held Asbury Automotive Group leaped from No. 39 in 1997 to No. 3.
Industry watchers have long predicted that Asbury of Conshohocken, Pa., will be among the next major dealership groups to go public. In 1998, Asbury retailed 68,000 new vehicles and had revenue of $3 billion.
Asbury CEO Tom Gibson said his company has not ruled out that option. Still, he said he believes that Asbury has done well because it does not have the pressure of having to meet quarterly earnings goals. That, he said, enables the company to concentrate on acquiring dealerships that have good customer service practices, are profitable and are run by astute business people.
'We've been fortunate,' Gibson said. 'We have deep pockets and patient investors, and that allows us to focus on quality dealerships.'
Also on the move was publicly owned Group 1 Automotive Inc. The Houston-based company moved from No. 10 in 1997 to No. 6 in 1998.
Said Ben Hollingsworth, Group 1 CEO: 'Wall Street looks for performance. It rewards those that can meet or exceed expectations. Wall Street is unforgiving when you don't meet its expectations.'
Some of the companies on the list will not be around for the millennium.
Cross-Continent Auto Retailers Inc. of Amarillo, Texas, the first chain of new-car dealerships to go public, was purchased by the biggest of them all, AutoNation, in February 1999. Cross-Continent ranks No. 32 on the 1998 list with sales of 14,551 new vehicles and revenue of $689.8 million.
Also making their last appearances on the list are Tasha Automotive Group (No. 16) of Fremont, Calif., and Fox Automotive (No. 64) of Baltimore. AutoNation purchased both groups last year.
FORD AS PART OWNER
For the first time, the list contains a dealer group partly owned by a manufacturer.
Tulsa Auto Collection (No. 38) in Tulsa, Okla., is a joint venture 60 percent owned by five Tulsa dealers and 40 percent owned by Ford Motor Co. through its subsidiary, Ford Investment Enterprise Corp.
Seven of the 100 dealership groups on the list for 1997 were acquired by larger groups in 1998.
And according to many of the principal players, Automotive News' list of top dealership groups will change even more next year as the buying spree continues.
'We'll probably be in the top 10 next year,' predicts Jeff DeBoer, vice president of finance and investor relations at the publicly owned Lithia Motors Inc., headquartered in Medford, Ore. Lithia moved from No. 79 on the 1997 list to No. 18 in 1998.
'Last year we acquired 11 stores,' DeBoer said. 'We've acquired seven more stores since the start of the year. Those seven stores represent $400 million in revenue. We've exceeded Wall Street's expectations for all nine quarters (since the company went public). We're excited about the future.'
Moving up from No. 4 in 1997 to No. 2 in 1998 is UnitedAuto Group Inc. with new-unit sales of 77,403 and revenue of $3.3 billion. United, which lost $10.1 million in 1997 and $797,000 in 1998, is selling controlling interest to Roger Penske, chairman of Penske Corp. in Detroit.
Penske's son, Greg Penske, is president of Penske Automotive Group of El Monte, Calif. Penske was 10th on the dealership list with sales of 24,514. It was 11th in 1997.
Rounding out the top 10 are Sonic Automotive Inc. of Char-lotte, N.C., in seventh place, and Bill Heard Enterprises Inc. of Columbus, Ga., in ninth. In 1998, Sonic sold 37,674 new vehicles, and Heard sold 27,895.