• by Karl Greenberg , April 1, 2015

At this week’s 2015 NADA/J.D. Power Automotive Forum, marketers, dealers, media researchers, economists and social media experts talked about the car business and world economic fundamentals driving it. The highlight of the day was Warren Buffett, who is now knee-deep in the dealership lake. Berkshire Hathaway Inc. last fall signed on to buy Van Tuyl Group, the largest privately owned U.S. dealer network. Now the group, which comprises 75 stores, is wearing the name “Berkshire Hathaway Automotive.” The operation will move from Phoenix to Dallas, but otherwise it will run -- as it always has -- with CEO Larry Van Tuyl at the helm. 

Van Tuyl, who joined Buffett onstage for the Q&A setup moderated by CNBC's Becky Quick, said the cash deal was done essentially with a handshake, par for the course for Buffett. “We were acquainted,” said the auto retailer, saying that they talked it over and made the deal. “He's a quick study.” Van Tuyl's group is now in 10 states, but he said the plan is to expand, though not outside the U.S., not yet, anyway. Both said that Buffett will do what he does with most of the companies he acquires: Let management stay the course. Said Van Tuyl: “His office has 25 people. When he says you continue doing what you've been doing, he means it. We have kept it the same. Nothing has changed.” 

Neither Buffett or Van Tuyl are worried about Tesla as a threat to the traditional franchise model largely because the high-end electric car maker isn't selling a threatening number of vehicles. “I don't see any serious volume potential there,” he said. “And their pricing, for what they build, is upper end. But new technology is always good; it forces us to challenge ourselves.” 

Buffet conceded that Tesla is a challenge to the traditional system, but that the system won't change because the system works. “It works for the manufacturer, the dealer and the consumer. It's been around a long time, and usually when it becomes that fully established there's a reason for it.” 

He is also bullish about the U.S. economy, within reason, noting that, while homebuilding has slowed, employment is strong and the automotive business has been especially healthy. “If you just focus on home building, you get discouraged. The percentage of people living in owner-occupied houses is going down, but the economy is getting better.”