Top 150 dealership group rankings change after buy-sell flurry

Acquisitions and improved new-vehicle availability helped Keating Auto Group's new-vehicle sales soar 19 percent in 2022 — sending it 13 spots up Automotive News' latest list of the top 150 dealership groups based in the U.S.

Keating Auto, of Victoria, Texas, bought seven dealerships in late 2021, all in Texas, and Ben Keating, the group's owner, credited those purchases, which included three high-volume Hyundai stores, as a big reason for the company's growth last year. Keating's 2021 acquisitions followed three dealership purchases in 2020. "That was a lot for us," Keating told Automotive News. "We still feel like we are digesting those purchases."

And yet Keating continues to look for more dealerships and even made a couple of offers on stores this year, though those efforts haven't resulted in any new deals.

Keating Auto is among dozens of dealership groups seeking growth through store acquisitions and driving consolidation in automotive retail. The effects of that accelerating consolidation are stamped all over Automotive News' updated dealership group ranking — from deal-making juggernaut Lithia Motors taking over the top spot from longtime leader AutoNation to the companies on the list hitting new milestones in the collective market share they command.

Dealership buy-sell activity reached what is widely regarded as a high point in 2021, and the results of the many megadeals struck that year were fully in effect in 2022. Several dealership group leaders who spoke with Automotive News credited acquisitions with boosting their 2022 sales volumes, and thus their list rankings.

And the strong deal pace continued in 2022 and even into 2023, but the nature of the activity is changing.

After starting strong in 2022, transactions slowed a bit as the year progressed because of rising interest rates, inflation, geopolitical pressures such as the Russia-Ukraine conflict and other headwinds, said George Karolis, president of Presidio Group, an investment banking and advisory firm in Denver and Atlanta.

Still, demand from dealers to grow via deal-making remained close to record levels, Karolis said. But changing conditions have meant an emerging disconnect between what sellers are seeking and what buyers are willing to pay.

"The question will be, will sellers be reasonable and come to terms with buyers in this sort of evolving environment we're in that's not as strong as it was?" Karolis said.

The top 10 groups on the list and the overall top 150 increased their share of both the industry's new-vehicle sales and its number of U.S. dealerships, according to the Automotive News Research & Data Center, which compiles the list.

The top 10 sold 1,408,912 retail and fleet vehicles in 2022 and commanded 10.2 percent of industry new-vehicle sales, up nearly a full point of share and crossing the 10 percent threshold for the first time. The top 150 sold 3,440,740 retail and fleet vehicles last year and held 24.8 percent of industry new-vehicle sales, up by a half-point from a year ago. A decade ago, for 2012, the top 150 held a 19.1 percent share.

On the store side, the top 10 owned 1,617 stores or 8.9 percent of Automotive News' total count of franchised dealerships in the U.S., up from 8.6 percent a year ago. The top 150 owned 4,260 stores, or 23.3 percent of U.S. dealerships, up from 22.7 percent for 2021. That's a big jump from 2012, when the top 150's share of dealerships was at 14.8 percent.

Sales and store counts reported by a handful of groups on the list included a small but undetermined number of used-only and non-U.S. outlets and motorcycle, recreational vehicle and powersports stores.

Large transactions that successfully closed in 2021 likely inspired some sellers who in the past hadn't thought there would be buyers for their deals, Karolis said. More sellers came to the market emboldened, he said.

"We'll see some larger transactions continue to get done in the industry over the next few years," Karolis said. "I don't think they're done yet. We still think that activity will be driven in large part by private dealers, private transactions."

Automotive News' top 150 ranking doesn't include all of the biggest dealership groups in the country. Some choose not to report their data to Automotive News. Others report intermittently.

McGovern Automotive Group of Newtown, Mass., landed at No. 65 for the 6-year-old company's top 150 list debut. McGovern added nine dealerships to its portfolio in 2022, capping a busy buying year with its Dec. 28 purchase of a Ford store in Saugus, Mass. McGovern retailed 13,074 new vehicles in 2022 and has 24 new and used-only dealerships in three states.

CEO Matt McGovern said the group plans to purchase a 25th store in the next month or so. He said he remains bullish about growth though noted that 2023 may be more of a regrouping year following the "heydays" of the past few years.

"We've got some real estate projects to do, then in 2024, we'll restock the shelf and get back after it," McGovern said.

Del Grande Dealer Group, of San Jose, Calif., grew in its home territory over the past 18 months by adding dealerships selling Audi, Genesis and Honda brands, CEO Jeremy Beaver told Automotive News. The group's retail new-vehicle sales grew 6 percent to 13,853 in 2022, and it rose 18 spots on the list to No. 60.

"Our strategy remains the same," Beaver said. "We're a larger-scale dealer group that has the ability to add single points or multiple stores at a time because of the technology that we have built over the last five years that allows us to have different economies of scale."

Ciocca Dealerships, of Allentown, Pa., retailed 15,247 new vehicles in 2022, up 26 percent, vaulting it 32 spots up the list to No. 51. The group acquired six stores from Flemington Car & Truck Country in New Jersey in August. Those stores, plus improved new-vehicle supply, helped boost sales volume, CEO Gregg Ciocca told Automotive News.

And Ciocca said he wants to keep growing and is having conversations with dealers looking to exit the market as consolidation continues. If everything goes smoothly, Ciocca is aiming to size the group up to 50 dealerships by year end.

Staluppi Auto Group, of North Palm Beach, Fla., retailed 49,547 new vehicles in 2022, up 11 percent. It rose one spot on the list to No. 10. It had frequently been in the top 10 in years past, most recently in 2020 for its performance in 2019.

CEO John Staluppi credited more inventory availability in 2022 for the improved sales. "It's almost 100 percent better now," he said. He is targeting retail new-vehicle sales of more than 50,000 in 2023 from the group's 20-plus stores in New York, Nevada and Florida.

Staluppi has been acquiring, too, purchasing a Chevrolet store in Brooklyn, N.Y., in December. He predicts more dealerships will go up for sale in the next few years and plans to stay in buying mode but will be selective.

"I don't want to just buy any store," Staluppi said. "They have to be the right stores."

Julie Walker and Jack Walsworth contributed to this report.