Are national dealers on the horizon?

The industry consolidation you read about on the pages of Pit & Quarry typically pertains to the nation’s aggregate producers.

The biggest producers in the industry are indeed getting bigger, utilizing M&A as the premier pathway forward while supplementing their growth with greenfields. But as companies like Vulcan Materials, Martin Marietta and CRH get larger, so too have some of the industry’s equipment dealers. 

The dealer serving a single state or a small territory today hasn’t gone by the wayside. Still, if you stop and look around, you’ll notice some of the dealers out there are now regional or multiregional in nature. 

The most successful of these grew behind years of thoughtful planning and detailed execution. As you’ll read in this month’s “Dealer Issue” cover story, some dealers expanded to keep up with customer demands – particularly those of the regional and multiregional producers.

The rise of the multiregional dealer, then, begs a question: Is a national dealer next? 

National producers are certainly a thing. CRH, for instance, describes itself as the “largest building materials business in North America,” with operations in 48 U.S. states and seven Canadian provinces. 

CRH didn’t become a multinational corporation overnight, though. Building a dealership to that degree would be an unprecedented undertaking. It’s a rather complex one, too, given many manufacturers currently utilize a network of dealers to sell and service their equipment nationwide. 

A dealer could, ultimately, expand to a level where its reach impacts the entire U.S. But one dealer representing a single brand across all 50 states? A lot would have to transpire over many years for that model to become workable.

As one dealer shared during an interview ahead of this month’s edition: “You can’t just go in, buy somebody and expect to be the dealer for the brands [over there that] you [represent] over here. There are contracts, it’s complicated and there are very successful people who aren’t going to give you control. It doesn’t work that way. So that will limit [the idea].”

Like the industry’s producer side, M&A might be the most effective pathway to establish a national dealership. But even with assets in every nook and cranny of the country, it might take years – decades even – for a dealer to fully represent a single leading brand nationwide.

“In the private-equity realm, I can see them making acquisitions regardless of the brand, just riding out the storm and hoping they can shift it over time,” this same dealer told me. “Or, just having multiple brands they represent. I can see them doing that to get the growth.

“But that to me doesn’t feel like a national dealership,” the dealer adds. “That feels like a segmented dealership with multiple brands in multiple states.”

It takes time and resources to successfully expand into a new territory. Dealers have jumped into new states before thinking they could simply replicate what they were doing at home. Achieving such growth, however, is easier said than done.

Featured Photo: P&Q Staff

Related: The key to a successful dealer partnership