Now that Berkshire Hathaway has completed its acquisition of Van Tuyl Automotive, Warren Buffett is looking to add more dealerships to his company’s holdings.
“We are now car guys,” said Buffett, in his annual letter to Berkshire Hathaway shareholders for 2014.
Buffett noted there are 17,000 dealerships in the U.S., and ownership transfers require approval by the relevant auto manufacturers.
“Berkshire’s job is to perform in a manner that will cause manufacturers to welcome further purchases by us,” wrote Buffett.
“If we do this — and if we can buy dealerships at sensible prices — we will build a business that before long will be multiples the size of Van Tuyl’s $9 billion of sales,” and added Van Tuyl Automotive is a group of 78 dealerships, and now the fifth largest automotive group in the U.S.
The Berkshire CEO commended Van Tuyl Automotive for being “exceptionally well-run,” by Larry Van Tuyl, the company’s owner, and his father, Cecil, who spent 62 years building the group.
Buffett mentioned he met Larry Van Tuyl a few years ago, and that Van Tuyl said if he were to ever sell his company, it would be to Berkshire Hathaway. The contract to purchase the automotive group was announced in October.
With the Van Tuyl acquisition, Berkshire Hathaway now owns 9.5 companies (with Heinz listed as a half) that would be listed on the Fortune 500 had they been run independently.
“That leaves 490.5 fish in the sea,” he says. “Our lines are out.”
