Warren Buffett was on CNBC on Thursday morning, and he just announced that Berkshire Hathaway had purchased Van Tuyl Group, a company based in Arizona that owns 78 auto dealers.
He strongly suggested that Berkshire would buy more auto dealers, probably using Van Tuyl as a vehicle to do an industry rollup.
Why the move?
It’s clear Buffett sees plenty of room for consolidation in the industry, as Buffett notes that there are 17,000 dealers in the country.
Folks on Twitter are also pointing out that dealers often have great real estate and nice, regulated moats in their industry, which is the kind of thing that Buffett likes to own.
For more on Buffett’s CNBC appearance, see here.