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Steele Auto Group, with 49 stores in Atlantic Canada, wants to grow fast, so it's investing south of the border.
Steele, of Dartmouth, Nova Scotia, some 150 miles east of Maine, entered the U.S. in 2020 with three domestic brand stores in small Texas towns. This month, it added two Hyundai dealerships between San Antonio and Austin, where CEO Rob Steele has a vacation home.
With an eye to double its sales and profits in three to five years, the fast-growing company is just getting started making acquisitions in the U.S., President Kim Day told Automotive News.
"Our highest growth opportunity is in the United States," she said. "We're very interested, of course, in growing our presence in that Texas market. We're also really interested in opportunities in Florida [and] even closer to home ... in the New England states."
Steele is one of several Canadian dealership groups that have a footprint in the U.S. and want to grow it. Many are flush with cash after two years of soaring profits, and they see a market to the south where the weather is warmer, dealers have strong franchise protections and prices are often lower than in Canada, particularly for stores in rural locations, dealership buy-sell brokers said.
Bigger groups, in particular, looking to grow and diversify their portfolios are finding opportunities in the U.S., said Gordie Gerbrandt, Canadian director in Edmonton, Alberta, for Tim Lamb Group, a buy-sell advisory firm in Columbus, Ohio. Tim Lamb expanded to the country in 2019.
Getting a break from Canada's stricter COVID-19 policies doesn't hurt, either, Gerbrandt said.
"Canadian dealers look at a place like Texas that's got...