What are OEM Business Drivers?
What are the biggest factors driving the consolidation we’re seeing today? We see a confluence of two major trends that are driving faster consolidation. First, buyers are more aggressive. They are making record profits and are comfortable with the trends in theindustry that will reward larger groups that have more access to capital, people and technology. Groups like this, such as Lithia, are confident about their futures in the auto retail industry and they want to own more stores. The other reason for more rapid consolidation is that a growing number of dealers are becoming concerned that it will be harder for them to compete in the future. They worry about the increased need for investments in facilities and technology. And they wonder about the impacts of electrification, new OEM entrants, the desire for OEMs to sell directly to consumers, and other potential changes that could reduce the value of their businesses. And for some dealers, there is a bit of a rush to ...