Famous investors George Soros and Warren Buffett both increased their stakes in General Motors this week, indicating they have confidence in the manufacturing side of the auto business. Buffett has already shown his confidence in the auto retailing sector by buying Van Tuyl. Soros has his associates sniffing around the retail side for potential investments.
While big-name investors grab the headlines, auto retailing is still overwhelmingly a family-dominated business, however. Of the nearly 18,000 dealerships in the U.S., more than 80 percent are owned by small groups or individuals, and families figure prominently. Many of those smaller groups are about the size of Sage Automotive Group in Los Angeles.
This week I talk with Joseph Sage, one of three brothers running the business started by their father Morrie. He says the group won’t acquire stores simply to become bigger. It has a philosophy it sticks to when evaluating potential acquisitions. Still, there are some brands it would like to own.
The Sage Group’s most recent acquisition was an open point for a Chevrolet store. For an established and successful group such as Sage, landing an open point can be a great opportunity. But an open point acquisition can also be filled with challenges, especially for an individual, attorney Joseph Aboyoun tells us in this week’s issue.
From burdensome facility requirements to potential protests by same-brand dealers, the open point isn’t always as keen as it might seem, Aboyoun warns.
And of course we have this week’s Transaction News.
Enjoy!
