Suddenly, Wayne Huizenga's Republic Industries is everywhere.
In recent months, Republic has accumulated more than 50 dealerships all over Southern California. Last month alone, it took over three local car dealership groups, including Buena Park-based House of Imports, the nation's largest dealer of Mercedes-Benzes.
For the first time, Republic appears on the Business Journal's annual list of top 25 new-car dealers in L.A. County. It owns three dealerships on the list, including No. 5 Magic Ford in Valencia. (No. 1 one on this year's list is Longo Toyota, which is part of the Penske Automotive Group.)
"Coming to California, which represents 10 percent of the new-car national market, enhances their opportunity to get in the business big time," said Jay Gorman, executive vice president of the 1,500-member California Motor Dealers Association in Playa del Rey.
So far, the impact on overall sales appears to be minimal. "The first store they bought in Southern California was Magic Ford, and based on my report I haven't seen an increase in sales from the previous owner," Gorman said. "I haven't seen an impact on the industry in one way or another."
But that may change as Republic ramps up for its AutoNation USA superstores. AutoNation, a group of 38 used-car dealerships around the country owned by Republic, offers haggle-free pricing and a huge selection that is difficult for other dealers to match.
AutoNation opened its first California outlet in Irvine in January and plans to beef up its presence in Southern California by leasing sites for new superstores in Oxnard and Long Beach.
Also in the superstore category is Virginia-based CarMax, a publicly traded subsidiary of Circuit City Stores, which plans to open as many as eight of its own new- and used-car superstores in Southern California.
Analysts say these giants eventually will become a significant threat for smaller dealers.
"As a major company, (AutoNation) has more leverage in lowering borrowing costs to finance dealer inventories. They can significantly reduce their interest rates," said Cheryl Bostater, an analyst with Chatfield Dean & Co. in Denver. "Smaller dealerships couldn't get those kind of rates."
For the moment, however, local dealers say the competition only makes them stronger.
"There are certain things about Republic Industries that have been talked about in the trade magazines, primarily dealing with their friendlier sales process, that have made auto dealers pay attention," said David Conant, president of Cerritos-based Norm Reeves Honda. "Companies are making changes to the buying process that make it more customer-oriented, and from that, most of us have benefited."
In two years, Fort Lauderdale, Fla.-based Republic, a one-time solid waste collector and distributor, has amassed about 350 dealerships nationwide, making Republic the world's largest retailer of cars and trucks.
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