economy
'It's just scale': Local mom-and-pop car dealerships are growing or dying amid industry consolidation, rise of mega-retailers
Multibillion-dollar dealerships have been on the rise amid a decadeslong consolidation that has led to a grow-or-die mentality for many U.S. auto retailers.
TL;DR
- The car selling industry is consolidating, leading to a grow-or-die mentality for U.S. automotive retailers.
- Mega-dealerships and publicly traded companies like Lithia Motors and AutoNation have seen their market caps soar.
- Family-owned dealerships, like Sylvester Chevrolet, are selling due to the challenges of competing at smaller scales.
- Industry consolidation is driven by factors such as the adoption of electric vehicles, AI advancements, and automaker demands.
- The top 150 dealers increased their share of new vehicle sales, and they own a larger percentage of dealerships compared to a decade ago.
- The average dealership owner has between two and three stores, but medium-sized dealerships (6-25 stores) have seen the most growth.
- New automakers like Tesla, Rivian, and Lucid are attempting to bypass the franchised dealer model with direct-to-consumer sales.