Some of the heavy negotiating going on in auto showrooms across the state has nothing to do with cars or trucks.
There is a flurry of bargaining among dealers looking to cash out and leave a business whose future is not nearly as bright as its recent past.
"I know of four dealers who are in various stages of sale negotiations. And this is only within the past three months," said Jacob J. Cohen, managing director of the auto dealers' group of American Express Tax and Business Services Inc., which provides financial services for many of the state's new-car dealerships.
To put that figure in perspective, Cohen said only three or four state dealerships will normally change hands in a year.
The prospective sales have to do with changing economic times, said Cohen, who predicts a quarter of Maryland's 350 new car dealerships would likely be sold within five years.
"Times have been very, very good for dealers in recent years, and some dealers have decided to get out while the market is at a peak," said Peter Kitzmiller, president of the Maryland New Car and Truck Dealers Association.
"There is a lot of talk going on, but it's pretty hush, hush," he said. "They don't want their employees to know. They don't want their customers to know."
Cohen said that almost all dealers in the state "have their eyes open" to potential offers.
He listed several reasons for this, including:
A dealer may have no son or daughter to take over the business, or the family may not be interested in taking over the dealership.
Some dealers are burned out from running the business. They are tired of the day-to-day battles with the manufacturers concerning how they can run their dealership.
The business is becoming increasingly competitive.
Concern that new car sales will begin tapering off after reaching a record high this year.
Cohen said that it normally takes at least a year to complete the sale of an auto dealership, but he expects some announcements to be made before the end of December.
Michael G. Martino was one of the more recent dealers to leave the business. He sold Village Volvo, in Bel Air, earlier this year to Sonic Automotive Inc., a publicly-owned auto retailer in Charlotte, N.C.
"The opportunity was right for me," Martino said. "They hit me with enough money.
"And what happens if this market falls off? You have to wait until the next cycle to get out, and that would be five to seven years, maybe even 10."
He said the car business was fun, but it was becoming increasingly competitive. "You had to grow the business to survive. I don't want to say the business is not as good as it used to be, but it was getting harder and harder to run a small operation."
Martino said he did not want to put up the money needed to expand his operation and wait another seven to 10 years for a return on his investment.
Cohen said other dealers are watching Martino's move. "They can sell, take the money, put it in long-term investments that are less risky and make more money." "A lot of dealers are planning their exit strategy," Cohen said, adding that most of them are single location outlets with multiple franchises.
"I didn't want to go back in debt," said Martino. "It was time to go."
