Is the Independent Car Dealer ‘Dead’? #Motorama

The average local car dealer is independent relative to the car company whose product they sell.  However, increasingly car dealers are no longer independent, privately owned firms.  Car dealers are generally owned by large corporations such as Group 1 Automotive:

Group 1 Automotive, Inc. is a Fortune 500 company, founded in 1997. It has its headquarters in the One Memorial City Plaza building in the Memorial City district of Houston, Texas. Wikipedia

Stock price: GPI (NYSE)

What does that mean for you as a car buyer?  Even the manager of your local dealership isn’t the Owner — who may not even live in your state.

Of course Autonation, arguably the largest automotive retailer, with ~266 dealerships across the US, is clearly a large presence in the market.  Autonation stores, however, generally are clearly branded and  marketed as Autonation and not as Independent Dealerships.  When a Buyer goes into their local Cadillac Dealer, named as it has been after the family that started the dealership, the Buyer may be under the mistaken impression that the store is in fact family owned.

What does that mean for the overall model constructed around the theory that independent car dealer sell more cars than factory stores?  Is the theory still valid in this age of large “corporate” retailers? If the best way to run individual dealerships now is to bring them together into large corporations why is it not even MORE efficient (and profitable) for Cadillac to own all the Cadillac dealers as an income generating subsidiary instead of relying on partner corporations that own and sell a variety of brands?

Should GM and Cadillac start to buy up large car sales groups?

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