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Author Topic: Private equity firms now allowed to buy dealerships  (Read 1079 times)

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2002FXDWG3

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Re: Private equity firms now allowed to buy dealerships
« Reply #15 on: January 22, 2019, 09:04:19 PM »

Reminds me of the saying, you can shear a sheep a dozen times but you can only gut it once.
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scottt

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Re: Private equity firms now allowed to buy dealerships
« Reply #16 on: January 22, 2019, 09:27:02 PM »

Reminds me of the saying, you can shear a sheep a dozen times but you can only gut it once.
Bingo!

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Tractor Bubba

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Re: Private equity firms now allowed to buy dealerships
« Reply #17 on: January 26, 2019, 11:38:02 AM »

As someone that's spent my life & career in a similar industry, mostly on the "OEM Management side" intimately involved with company-dealer relationships, I found this a very interesting article.

I found the "no more than six dealerships" particularly fascinating. Expanding that to ten is not so alarming - but the change from requiring a single, majority ownership (one person must hold at least 50.1% ownership) to allowing private equity group type ownership is a real paradigm shift. It will be interesting to see what that does to the end-user pricing structures - as in my experience large, well-managed multi-state operations tend to earn "lower but more consistent" new machine sales margins while focusing on higher dealership absorption rates through efficient parts, service, accessory & financing business.

I'm not sure how allowing PE ownership within the dealer network would necessarily translate into a hostile takeover of The Motor Company. But it's certainly an interesting topic, and one that will be worth watching.

And, I also found the requirement that for a dealer to expand his/her ownership footprint, they have to be in the one-third of dealers performance-wise to be intriguing. From a sales growth and manufacturer-dealer business point of view it makes sense - however that doesn't necessarily provide the customer base more, better SERVICING dealers.

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dayne66

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Re: Private equity firms now allowed to buy dealerships
« Reply #18 on: January 26, 2019, 12:29:02 PM »

This change will work for a few years, after that i really question.


Didn't even work for a few minutes here!
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