I read in Automotive News that AutoNation plans to increase its already substantial holdings with another $10 billion of revenue from additional dealerships.
It already has almost 400 franchises and nearly 300 locations, with a remarkable $16 billion in revenue. Not bad for a company that didn't exist in the automobile business just a few short years ago. Make no mistake: The AutoNation people have created the modern-day 600-pound gorilla. A regular King Kong.
It's a tough model to understand in the United States, where the norm has been private ownership of retail dealerships with the super dealer of a decade ago owning perhaps as many as 30 or 40.
And if that's not enough, Ford wants to control many of its retail outlets as well, not only here but in many other parts of the world, from Europe to Australia.
Times are changing in North America, and, happily, there are enough sales out there to support all sorts of different models. And we haven't even thought about the Internet and what impact it will have on automobile retailing.
Germany has a long history of factories owning their dealer channels. That has not been detrimental to the manufacturers.
It is a different system, and it may be dangerous to assume anything from what happens thousands of miles away. The retail business is different from country to country. You are at your own peril when you try to sell your global car through your global dealership.
So how big is big? Can AutoNation gain efficiencies by adding enough dealers to generate another $10 billion in revenue?
My best guess is that the biggest impact of AutoNation's acquisition of those additional dealerships will be an endorsement of its entire business plan.
AutoNation may have wanted more results by now, but it would appear that it hasn't lost any enthusiasm for the retail car business. Whether Wall Street will agree is another matter.
But can you simply get too big to manage? I don't think so. There is probably no ceiling to the number of dealerships any organization can operate. Will they have an advantage over the smaller dealerships? Ford seems to be finding that there is some real competition from existing dealerships, and I think AutoNation will discover the same.
Right now we're seeing many models on the right way to do business. Chances are pretty good that they will all co-exist in the next century.