Is George Soros About To Invest In Retail Automotive?

Warren Buffet may soon have a billionaire competitor in the retail automotive realm. Several news outlets have reported George Soros is looking into a retail automotive investment. Automotive News first reported that Soros had representatives attending the National Automobile Dealers Association Conference last week in San Francisco.

According to Fortune, the apparent goal for the representatives at the conference was to, “… research the industry and find potential investing opportunities.” USA Today reported that Vipul Tandon, a representative for Soros, spoke to approximately 40 dealers at a private San Francisco dinner. Analysts estimate that Soros could spend upwards of $1 billion dollars on an investment into the retail auto industry. The investment on the part of Soros is reportedly a way for him to diversify his holdings and cash flow opportunities. Soros would certainly add a familiar and powerful face to an industry. Retail automotive just saw one of the most famous investors in the world join its ranks in 2014 when Warren Buffett purchased the Van Tuyl Dealergroup. Soros could add intrigue to the industry, however, will he make as big of a splash as Buffett did?

In October of 2014, we reported that Berkshire Hathaway, Inc. was going to acquire the Van Tuyl Group. Van Tuyl being acquired made headlines for a few reasons. For one thing, it was the largest private dealer group in the United States. Also, Warren Buffet was involved and speaking publicly about the purchase and retail automotive. Appearing on CNBC just after the announcement, Buffett joked that the purchase meant that Berkshire would now be, “planes, trains and automobiles,” referencing the 1987 film starring John Candy and Steve Martin.

In an interview with Fortune, Buffett said, “The car dealership business if run well can be a very good business.” All interviews with Buffett on this issue showed a man very interested and hopeful about his latest business move. The question is, what is George Soros planning? Why is he potentially getting into retail automotive in the near future?

It’s possible Soros is looking into the industry at a time when vehicle sales have been performing strongly and seemingly put the recession in the rearview mirror. The Detroit News reported at the end of 2014 that new and used auto sales had combined to generate $1.1 trillion dollars. That’s trillion with a ‘T.’ Eric Lyman, Vice President of Insights for TrueCar, said in a statement, “2014 was a year of recovery and growth for the auto industry, and that trajectory continues into 2015 as TrueCar expects new vehicle sales will reach 17 million units. Even more compelling is our projected revenue growth of 4.8 percent, which is the result of increasing sales volume and rising average transaction prices.”

Auto sales are expected to hit 1,446, 600 units for the month of January 2015, which would be an increase of 13.2 percent from the same month one year ago. Soros and Buffett, two of the most powerful investors in the world, might be getting into retail automotive at just the right time. As TrueCar’s Lyman said, “With solid economic expansion under way and consumer-friendly gasoline prices, the auto industry remains a high-growth sector.” How much longer will the industry grow? All signs are pointing to a great year for 2015? What feedback about the economy are you getting from your customers?