Cars and Drivers
Warren Buffett Gets in the Car Dealership Business
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Warren Buffett is on the move again. Thursday morning he announced that Berkshire Hathaway Inc. (NYSE: BRK-A) had entered a definitive agreement to acquire the Van Tuyl Group. The transaction is expected to be completed in the first quarter of 2015. The Van Tuyl Group has over $8 billion in revenue and has 78 independently operated car dealerships spanning 10 states. The company’s site talks about its presence in Arizona, Kansas and Texas.
The Van Tuyl Group was founded in 1955 by Cecil Van Tuyl who would later pass the mantle to his son, Larry Van Tuyl. In the United States, the company is the largest privately owned auto dealership group, ranking fifth among all auto dealership groups.
The company will change its name to Berkshire Hathaway Automotive and will retain Larry Van Tuyl as chairman. Jeff Rachor will assume the position of CEO. Berkshire Hathaway Automotive will be headquartered in Dallas, Texas.
To show just how much this industry can consolidate, we included a historical dealer count from the National Automobile Dealers Association (NADA). The number has declined steadily through time, but there is still a massive opportunity for consolidation here.
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Warren Buffett commented on the transaction:
The Van Tuyl Group fits perfectly into Berkshire Hathaway from both a financial and cultural viewpoint. Larry Van Tuyl along with his father, Cecil, spent decades building outstanding dealerships operated by local partners. In recent years, he has shared management with Jeff Rachor, a seasoned auto retailer who will retain a financial interest in all dealerships. This is just the beginning for Berkshire Hathaway Automotive.
Number of Franchised New-Car Dealerships (NADA), by Year and by count
1947Â 45,500
1948Â 46,000
1949Â 49,200
1950Â 47,000
1951Â 47,500
1952Â 46,000
1953Â 45,200
1954Â 41,900
1955Â 40,400
1956Â 41,000
1957Â 40,000
1958Â 37,300
1959Â 36,400
1960Â 35,000
1961Â 34,500
1962Â 34,200
1963Â 33,700
1964Â 33,500
1965Â 33,700
1966Â 32,900
1967Â 32,000
1968Â 31,100
1969Â 31,000
1970Â 30,800
1971Â 30,300
1972Â 30,100
1973Â 30,100
1974Â 30,000
1975Â 29,600
1976Â 29,300
1977Â 29,100
1978Â 29,000
1979Â 28,500
1980Â 27,900
1981Â 26,350
1982Â 25,700
1983Â 24,725
1984Â 24,725
1985Â 24,725
1986Â 24,825
1987Â 25,150
1988Â 25,025
1989Â 25,000
1990Â 24,825
1991Â 24,200
1992Â 23,500
1993Â 22,950
1994Â 22,850
1995Â 22,800
1996Â 22,750
1997Â 22,700
1998Â 22,600
1999Â 22,400
2000Â 22,250
2001Â 22,150
2002Â 21,800
2003Â 21,725
2004Â 21,650
2005Â 21,640
2006Â 21,495
2007Â 21,200
2008Â 20,770
2009Â 20,010
2010Â 18,460
2011Â 17,700
2012Â 17,540
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