After idling in traffic for a few years, the Steele Auto Group kicked its Newfoundland expansion plans into high gear late last year.
Having already acquired three dealerships in Corner Brook between 2014 and 2016 — City Chrysler, Fairway Honda and Parkway Hyundai — the Halifax-based automotive giant tripled down in a big way in 2017, buying nine more, including three of five dealerships under the Penney Group of Cos.
“I’ve been in the car business now since the late 1980s and the numbers in Newfoundland have always be phenomenally strong with car dealerships there, so I’ve always wanted to be in that market and there wasn’t much of an opportunity,” explains CEO Rob Steele, a native of Newfoundland and son of businessman Harry Steele.
“Then the Penney opportunity became available and that seemed really exciting to me and was right in our wheelhouse and would give us some critical mass in Newfoundland.”
The Penney dealerships were Penney Mazda, City Honda and Mercedes-Benz St. John’s. The company also purchased five dealerships in Central Newfoundland — Gander Kia, Gander Hyundai, Simmons Auto and Powerhouse, Gander Toyota and Grand Falls Hyundai — and most recently completed the purchase of Tucker Acura in Mount Pearl.
Steele says this kind of consolidation is common in the industry, and more and more independant owners are selling.
“Part of that is because the demands from the OEM, the manufacturers. They have high standards of image and investment that’s required that if you’re an independent, you look at it and go, ‘Maybe it’s time to sell out because these investments are significant when you’re upgrading facilities.’”
Steele says despite the economic challenges in Newfoundland in recent years, it remains a stable market.
“The car business has always been sort of a bellwether of the economy,” he says. “Even when the economy is down in Newfoundland, or slightly down, the car business seems to be pretty steady.”
As such, Steele says the company will target more dealerships for acquisition in Newfoundland, while also turning an eye to some opportunities in New Brunswick and potentially Ontario.
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