Republic to Buy More Toyota Dealerships

Republic Industries Inc. escalated a battle over auto franchise ownership Wednesday, saying it will buy two more Toyota dealerships despite the auto importer’s concern that it is buying too many too fast.

Toyota Motor Sales U.S.A. Inc. and American Honda Motor Co., both headquartered in Torrance, are resisting what they believe is a move by Republic Chairman H. Wayne Huizenga to gain control of up to 20% of their total U.S. retail sales. The importers restrict the number of dealerships any one entity can own.

“If this is an ‘in-your-face’ attempt to roll over us, we will fight it,” Toyota spokesman Bob Wade said.

Car companies have a lot of control over who buys their retail franchises, and Republic has negotiated acquisition agreements and limits with all of the domestic car makers.

But Honda and Toyota have said Republic wants to acquire more dealerships than the importers’ rules allow.

Toyota already has asked motor vehicle authorities in Texas to block Republic’s planned acquisition of a Toyota dealership in Houston.

And Honda last week filed a federal court suit in Los Angeles to try to keep Republic from acquiring Honda or Acura franchises.

Huizenga told shareholders at Republic’s annual meeting Tuesday that opposition from Toyota and Honda is “something of an annoyance,” but won’t interfere with the company’s plan to dominate the major new-car markets. “We know we will be a partner with them, sooner or later,” he said.

On Wednesday, Republic announced that it has agreed to acquire Gulf Management Inc., a Florida dealership group that operates Lexus of Tampa Bay and Lexus of Clearwater. Lexus is Toyota’s luxury-car brand.

Toyota policies prohibit buyers from acquiring more than one of its dealerships in a nine-month period.

Republic purchased a Toyota and Lexus dealership in Miami on Feb. 28 and since then has entered agreements to buy the Houston dealership and a Toyota franchise in Tempe, Ariz. Republic and the Tempe dealership owner are suing Toyota in state court there, alleging that the car company is delaying approval of the sale to punish Republic.

If all the sales are completed, the deal announced Wednesday would give Republic three Lexus dealerships and three Toyota dealerships. Toyota limits companies to owning no more than seven Toyota and three Lexus franchises nationwide.

“This is exactly what we have been concerned about--the seemingly uncontrolled acquisition of a large portion of our retail business,” Toyota spokesman Wade said.

Toyota wants dealers to wait between acquisitions, he said, “so we have an opportunity to evaluate the operation” to ensure that the franchise is being run the way Toyota wants its dealerships to be operated.

“It’s especially sensitive when you look at an organization like Republic, which is new in the auto dealership business,” Wade said.

Republic shares fell $1.19 to $26.125 on Nasdaq on Wednesday.

Bloomberg News also contributed to this report.