Well known billionaire investor Warren Buffett was last year the latest businessman to enter the thriving US automotive industry last year, with his investment fund entering the auto-dealership business.
The US arm of Japan’s Toyota Motor Corp seems to think the news is a positive one, with the world’s biggest automaker rolling out the “red carpet” to welcome the entrepreneur. Berkshire Hathaway Inc., Buffet’s investment arm, last year decided to purchase the assets of Van Tuyl Group, the largest closely held US auto dealer and according to Bob Carter, senior vice president of Toyota’s US operations, the carmaker soon met with the billionaire. Carter eased a meeting between Buffett and Toyota president Akio Toyoda weeks after the news of the buy out emerged – as the top manager of the automaker was in Los Angeles for a Lexus dealer meeting at the Dolby Theatre – the same place where the Academy Awards are hosted.
Buffet’s decision to acquire Van Tuyl represents the billionaire’s bet that amid the best sales years the auto industry has had since 2006 there’s room for consolidation and prospects for even better profits. Van Tuyl, with annual revenue exceeding $8 billion, has dealerships in numerous states, including Texas, Arizona, Florida and California and among them there are more than 20 Toyota, Lexus or Scion franchises.
For 2015, the US operations of Toyota expect the auto industry to be on its merry way once more, for the sixth consecutive year of sales gains, predicting the overall auto industry tally would reach 16.7 million units – up from 16.5 last year. According to Carter the growth is buoyed by continued consumer confidence, low interest rates and recoveries in the labor and construction markets.