QOTD: Is It Over for the Little Guy?

by Tim Healey

Published: July 16th, 2024

One of my favorite moments in The Sopranos involves mobsters trying to shake down a large, faceless corporation. When the mobsters are told by the manager of a local store that if he acquiesces, he'll be fired and replaced by someone else and the corporation will make sure the mob doesn't get any money.

Perplexed, one says to the other "it's over for the little guy."

That scene came to mind when reading/editing Matt's piece on Penske Automotive Group scooping up another prolific Ford dealership.

Penske is one of six large dealership groups that collectively own about one-third of new-vehicle sales. The groups, in order of sales, are Lithia, AutoNation, Penske, Group 1 Automotive, Asbury Automotive, and Sonic Automotive.

My question to you is -- are these groups going to continue to grow and take out the smaller dealership groups out there?

It's a tricky question, because there are small dealer groups that own multiple stores but are controlled or owned by one person. Think Perillo or Napleton if you're familiar with the Chicago market.

So it's not just a binary of those who own one store versus large companies that own hundreds. It's a spectrum, with some dealership groups being small chains with maybe 5-10 locations.

Keeping that in mind -- do you think groups like Penske and Lithia will swallow the dealership industry whole? Or can the smaller groups, as well as those folks who own just one store, still compete?

Sound off below.

[Image: Scharfsinn/Shutterstock.com]

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Tim Healey

Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.

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MaintenanceCosts on Jul 17, 2024
Auto franchise laws are nothing more than an opportunity to extract economic rents, and if Big Finance is good at anything, it's finding and taking over those opportunities. The likes of AutoNation and Lithia will make the little guys deals they can't resist. The only way to prevent that is to open up (preferably lots of) alternative sales channels.

3 Reply
Arthur Dailey on Jul 17, 2024
Hate to say it and agree with our resident 'official Putin spokesperson', but indeed Karl Marx predicted this over 150 years ago. Unfettered capitalism results in a concentration of wealth and power among a few corporations. Corporations who have no loyalty to any one nation. We see this with multi-national corporations whose gross revenue is greater than the GDP of many nations. Corporations who buy and sell governments, or who finance civil wars/revolutions. Corporations who ignore health and safety or environmental legislation or regulations. Corporations who knowingly sell products that are unsafe or health hazards. Governments are by definition inefficient. However only government intervention in the form of tariffs, or employment/environmental/safety regulation and anti-trust/competition legislation are the only counter balance.

3 Reply
- See 2 previous
- Zerofoo on Jul 17, 2024
  It's funny that both Marx and Engels's academic pursuits were all supported by capitalist activity. If it were not for Engels's money derived from capitalist activity neither would have been able to pursue their nutty theories.
  
  2
- Arthur Dailey on Jul 17, 2024
  Marx asked all the right questions and identified the problems. However his solutions did not factor in human nature. They were however far from 'nutty'. As for Engels supporting him, so what? Every podcaster receives financial support from somewhere. Often anonymous support from nefarious agents of tyrants and enemies of western democracy.
  
  1
- Jeff on Jul 17, 2024
  Arthur Dailey--True. As for selling us the rope to hang ourselves today that rope would be made in China and would probably break.
  
  1

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