Multiple Lansing-area dealerships have changed owners this year

LANSING – The landscape of Greater Lansing's auto dealership industry has significant changes this year after multiple stores changed ownership.

In the past 12 months, Fox Nissan of Lansing became Graff Nissan of Okemos while Glenn Buege Buick GMC in Lansing became part of the LaFontaine Automotive Group.

Courtesy Ford transitioned to Merrill Ford Okemos and Suburban Cadillac of Lansing became Shaheen Cadillac.

According to officials with the Michigan Automobile Dealers Association, the cluster of sales is not unusual for Michigan and may be beneficial for consumers.

"It is not uncommon," said Terry Burns, executive vice president of MADA. "Usually, it's a win-win.

"There is changeover each year," Burns said, with between 4% and 7% of all dealerships in Michigan changing ownership in any given year.

The purchases, some of which are initiated by companies that already have a footprint in the region, often do not lead to decreased competition, Burns said.

The LaFontaine Automotive Group, for example, already operated Ford of Lansing and a Chrysler Dodge Jeep Ram and Fiat dealership, also in Lansing, prior to taking control of the Glenn Buege Buick GMC store on South Pennsylvania Avenue, renaming it LaFontaine Buick GMC. Buege continues to operate a Chevrolet dealership in Eaton Rapids.

"The competitive nature is still there," Burns said.

"It's very common today for a current dealer to be the very best option to purchase another dealer's store," he said.

Burns noted that an existing dealership already has established relationships in the community. 

"There are very few entrants into the auto dealership business," Burns said, because building a dealership from the ground up can be a prohibitively expensive venture with thin profit margins.

"One of the only ways to do this and be successful is to build an economy of scale," he said.

Burns also said that the sales do not indicate an unhealthy climate for automobile sales in the region.

"I think that if they close the stores that would worry you about the market," he said.

"(The purchases) still show that its a vibrant market," he said.

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Contact business reporter Christian Martinez atcmartinez@lsj.com or (517) 267-1342. Follow him on Twitter at @ChristianM_CA.

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