Billionaire Warren Buffett is paving the way for more outside investors to buy large dealership groups, experts said.
The purchase of Van Tuyl Group, the largest privately owned U.S. auto dealership group, by Buffett's Berkshire Hathaway Inc. will "embolden people sitting on the sidelines who didn't think they could get into the automobile business," said Mark Johnson, president of MD Johnson Inc. in Seattle.
Buy-sell advisers such as Johnson say they have seen growing interest from private-equity and outside investors in buying car dealerships, but in recent weeks, the pace of that interest is quickening.
"We get more and more inquiries," Johnson said. "They are all yield hungry."
Outsiders typically look for a return on investment that tops 15 percent, maybe even 20 percent, experts said. They said few other investment classes offer the return and ability to survive a recession that dealerships do.