Auto companies have set the stage for large dealership groups to dominate the largest car markets and most coveted brands.
Most automakers have backed off the limits they placed on how many stores big retailers could own. Factories set ceilings as dealerships began going public in 1996, but now the largest retailers are exceeding those limits with manufacturer blessings.
The largest dealer groups already account for up to 4 percent of sales for many popular franchises. Dropping the limits could consolidate the most desirable stores in the hands of a few large groups, allowing them to increase their share of sales.
The only holdout among the most coveted brands is Lexus, which limits retailers to three dealerships plus a small satellite store.
Manufacturers have discovered these groups are eager partners. Because of their deep pockets, big retailers commit to requirements such as store upgrades and higher customer satisfaction standards in exchange for more franchises.
While large dealership groups face other barriers - such as steep prices for dealerships, tough local competitors and, in some cases, heavy debt from rapid growth - retail giants are becoming favored candidates for additional franchises.
"We have grown to be more comfortable with the public (dealership) companies and found them to be very good partners," said John Kramer, corporate manager of distributors and public companies at Toyota Motor Sales U.S.A. Inc. "We have found they have the ability to be competitive in every way, whether it is sales or service or customer satisfaction."
Of the approximately 22,000 dealership locations nationwide, the 10 largest dealership groups control about 4 percent of them.
Even when manufacturers have relaxed the limits, market share remains in single digits.
For example, AutoNation Inc., the largest dealership group in the country, has only 3.6 percent of the total retail sales for Toyota and Lexus combined. Sonic Automotive Inc., the largest BMW dealer, has about 4 percent of total BMW retail sales. This year, Sonic also will account for about 7 percent of Cadillac's sales after acquiring 16 Don Massey dealerships.