Warren Buffet joins a growing club of billionaire car kings
Warren Buffett entered the car market in a big way this week when he announced he will buy the Van Tuyl group, the largest privately owned auto group in the US. Buffett joins a handful of official billionaire car kings in the US.
Car dealerships have created vast personal wealth for countless American families. And now, with help from Warren Buffett, the fleet of billionaire car dealers could expand even more.
Buffett's Berkshire Hathaway said Thursday that it's buying Van Tuyl Group, the largest privately owned auto group in the U.S. with around $9 billion in sales. The price was not disclosed but it's likely to make the Van Tuyl family official billionaires. And Buffett said he plans to use Van Tuyl as a vehicle to buy up other private dealerships for cash.
"I fully expect we'll buy a lot more dealerships over time," Buffett said on CNBC's "Squawk Box."
There are already a handful of official billionaire car dealers and (most likely) plenty of other more private families who are worth $1 billion or more.
- Norman Braman, the luxury-car king of Florida, has a net worth of $1.9 billion, according to Forbes.
- Red McCombs, founder of Red McCombs Automotive Group in San Antonio, Texas, and co-founder of Clear Channel Communications, had a published net worth of $1.4 billion in 2012.
- New Orleans Saints owner Tom Benson took his auto dealership profits and invested in local banks. He has a net worth of $1.6 billion, according to Forbes.
- Thomas Friedkin, with a net worth in 2010 of $1.5 billion, started his fortune selling Toyotas.
- Roger Penske, the billionaire who owns a mini empire of auto-related companies, got his business start as a Chevy dealer in Pennsylvania and owns hundreds of dealerships.
Buffett said there are around 17,000 dealerships in the U.S., the vast majority owned by families who are now in their second, third or fourth generation as car dealers and may be poised to cash out.
The Van Tuyls were case in point. Cecil Van Tuyl opened his first new car dealership in Kansas City six decades ago and branched out around the country to become the nation's largest privately owned auto dealership.
Van Tuyl died in 2012 at age 85. His son Larry, who took over the business, approached Buffett about six months ago about selling.
"We will hear, I predict, from hundreds of dealerships in the next year," Buffett said.
When the larger dealerships get acquired, those controlling families could well join Buffett in the billionaire's club.