AutoNation and Lithia’s race to dominate the auto dealership industry

Car dealerships have been mom and pop businesses for much of their existence. But the industry is slowly consolidating.

Six publicly traded dealership groups — AutoNation, Lithia Motors, Group 1 Automotive, Sonic Automotive, Penske, and Asbury Automotive Group — have been on a shopping spree in recent years, buying up a small but growing share of dealerships. And they’ve been wildly profitable.

Circumstances have been especially positive in the past couple of years. New car prices have hit record highs with parts in short supply and automobiles in high demand, especially for Americans who moved to suburban areas during the Covid-19 pandemic and needed their personal vehicles for their…