Toyota, Honda Apply Brakes To Republic’s Expansion

Japan’s two biggest automakers in North America are putting roadblocks in the way of Republic Industries Inc.’s ambitious plans to build a nationwide empire of new-car dealerships.

In the past two months, the U.S. sales arms of Toyota Motor Corp. and Honda Motor Co. have turned to federal courts and state regulatory agencies to slow Republic’s buying spree.

The moves seem to have barely fazed Republic. The Florida-based conglomerate run by billionaire H. Wayne Huizenga has continued to gobble up dealerships from dealers eager to cash in while Republic’s paying top dollar.

On Tuesday, Republic announced plans to buy a Honda dealership in Hollywood, Fla. Last week, it struck a deal to acquire the Appleway Group in the Spokane Valley, which includes the Toyota-Lexus franchise.

Appleway President Tim Pring said Toyota has yet to make a formal objection about the $42.6 million sale of Appleway to Republic, but it could happen. However, Pring doubted Toyota’s objection would kill the entire deal since Toyota is just one of several automakers who must approve the sale.

“If they (Toyota) flat out, no way, come hell or high water, disagreed, then I guess that could hold it up,” Pring said.

“The real issue is that Toyota has established limits as to how many dealerships they want Republic to own. Republic says that doesn’t fit with what they’re trying to do. It (Toyota) is not saying no; just slow down.”

Toyota has had some success in slowing Republic elsewhere. The automaker persuaded the Texas Motor Vehicle Board to postpone the sale of a Houston franchise pending a hearing. Owner Joe Myers then with drew from further negotiations with Republic after the proposed deal expired May 31.

Myers told Republic he wants to wait until the dispute between Toyota and Republic is resolved, said Republic spokesman Jim Donahue. He described Toyota’s tactics as an unnecessary nuisance.

“Our acquisition of Toyota and Lexus dealerships will go forward, hopefully in an atmosphere of some cooperation with Toyota, which we would very much like to bring about,” Donahue said.

But Toyota spokesman Bob Wade said Republic faces a state-by-state fight until it agrees to abide by Toyota’s franchise policies. Those include ownership of no more than seven Toyota stores and three Lexus stores, with a nine-month wait between purchases.

“The policies have been clearly stated,” he said. “We’ve discussed them with Republic. We have no intention to change them. And we intend to enforce them.”

The companies are preparing for an expensive fight. Honda has hired Los Angeles attorney Daniel Petrocelli, the plaintiffs’ lawyer who won a $33.5 million wrongful death judgment against O.J. Simpson.

In just a few months this year, Republic has become the world’s biggest auto dealer group. Since December, the company has bought or agreed to buy about 120 dealerships.

Republic also is busy expanding its chain of used-car superstores, called AutoNation USA, and running a big rental-car unit formed by its recent purchases of the Alamo, National and Spirit chains.

Huizenga envisions Republic eventually becoming a dominant player in automotive retailing, offering consumers a one-stop sales, service and rental supermarket under the AutoNation name.

, DataTimes