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Matt Bowers on M&A, Margins and the Future of Auto Retail

• Jim Fitzpatrick

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Matt Bowers, Owner of Matt Bowers Auto Group, discusses his counter-cyclical approach to dealership growth, profitability and navigating a softer retail market.

Bowers shares how his 12-store group is approaching acquisitions, inventory, fixed operations and long-term portfolio strategy as affordability pressures reshape consumer demand. He explains why he is targeting undervalued franchises rather than paying peak multiples, and why diversification is central to his expansion strategy.

Key discussion points:

  • Counter-cyclical M&A: Why Bowers targets brands at the bottom of their market cycle 
  • Profitability vs. volume: The risks of sacrificing used-car margins to chase sales 
  • Fixed operations: How vehicle affordability is supporting service revenue 
  • EVs and Chinese imports: Bowers’ outlook on pre-owned EV demand and global competition 
  • Portfolio strategy: Why no single OEM should account for more than 20% of group profits 
  • Leadership and growth: The fundamentals behind scaling from one store to a multi-state operation

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From One Store To Twelve

Jim Fitzpatrick

Welcome to Inside Automotive with Jim Fitzpatrick. Operating a dealership is one thing. Leading a 12-store dealer group across multiple states brings a completely different perspective on where the industry is headed. Joining us now is Matt Bowers, owner of Matt Bowers Auto Group. Matt, thank you so much for joining us this morning on CBT News.

SPEAKER_01

Thanks for having me, Jim. I appreciate it. It's good to be here. Good to be back here.

Jim Fitzpatrick

I can remember Matt Bowers when you were just running a store, and now you've got 12 dealerships and more to follow. So congrats on all of your success. Thank you.

SPEAKER_01

It was a long journey. But I look back into those times. That might have been the most fun I ever had, to be honest with you.

Jim Fitzpatrick

Really? Now you've got the pressure of this entire auto group. And uh how many employees make up Matt Bowers auto group now? Over a thousand.

SPEAKER_01

Everything's more fun when it's not your money, right? So like back then. That's a great point. That's right. I made a mistake. That's right. You money, not me. So uh anyway, yeah, for sure. But over a thousand um I got twelve plus a uh camper RV plays that I did some years ago, which is kind of a weird business. Um and uh I have two under contract that should close in the next 60, 90 days in Texas, yeah.

Jim Fitzpatrick

Yeah, incredible, incredible.

The Consumer Economy Feels Flat

Jim Fitzpatrick

All right, so let's jump right in. First and foremost, how is business overall uh uh throughout the throughout the group?

SPEAKER_01

Um I don't know. It's funny, like I read the the news, I watch the stock market, and to me there's a disconnect between that and what I see, like at a consumer level. Yeah. To me, it's a um the consumer economy, you know, just the regular Johnny Lunchbucket uh person on the street, I think it's more flat, yeah. Uh flat to down, you know, in certain areas. I mean it's flat, but the costs have risen. Um I mean, think about it. We're talking about used cars from an angle of we should go buy and sell used cars and sell them and lose money. Yeah. It's good because it's gonna beat our service. I mean, like are we talking about? Like it's kind of crazy. Yeah, but it's it's a it's it's a really weird market. And then the people in the business, I think that's the thing that I see the most, Jim. I think that the people in the business have tremendously shifted. Okay. So the people running these businesses um, you know, are really from a different era, yeah. Or from a different business, even. And so they don't think the same as traditional dealers, which is good in some respects, but I wonder sometimes where it's going.

Jim Fitzpatrick

So give me drill down on that a little bit. What what's the differentiator there?

SPEAKER_01

Um, I I I think that we accept less from the people. I really do. Like do I want to go spend millions of dollars to go acquire cars, to go lose, to go sell them for less than I bought them for? It's like, you know, there has to be some middle. But if that's an accepted principle across the board, yeah, uh in every corner of the country, it's a problem. And look, I saw it, I think all these problems started a long time back.

Jim Fitzpatrick

Right, right. And why is it that you're that you're you're buying cars, used cars, and then selling them for less than when you pay for it just because the fluctuation of the used car market at any given time?

SPEAKER_01

I don't I don't think I do that. I think everybody does that. Okay. I think if you look across the board, you know, they just push to use car volume, and you know, it's a uh you know, the margins have eroded into cars to nothing. And so I saw, you know, there's uh there's kind of illustrative examples of you know, you know, go to YouTube, go to any industry stuff. There's guys now not talking about used car grosses, they're talking about stuff like super grosses, which includes service reconditioning. I'm like, that's not anything new. That's called service reconditioning. That's not called, you know, so it's like it's it's just a bizarre industry that we're in right now. And at the end of the day, I think the driver of it is that the costs have risen, the cost of the product has risen, the cost of the vehicles have risen, wages have stayed flat, the expenses have risen. So I don't I'm glad that all the public companies are at all-time highs right now. We're doing well. Last year we had a really good year. This year we're down from last year.

Jim Fitzpatrick

I don't have any problem saying that. Um but yeah, and you're probably not alone in the industry. I mean, I think there's a lot of dealers that are in that same level.

SPEAKER_01

Yeah, I already know. But you know, there's a lot of headwinds out there that make me concerned. Maybe it's just these gray hairs and me getting old, right?

Jim Fitzpatrick

But like well, let me ask you, with that with that being said, you seem to still be bullish though, and you're uh, like you just said, you're acquiring two more stores. So there's there's gotta be some promise there in your heart that says we're gonna get through this and we're gonna be back to normal one day.

SPEAKER_01

I think the markets matter that you're in. I think that whether you own a pet store, uh a car dealership, a dry cleaner, you know, if you're in the greatest markets in the country, you know, if there's high employment, yeah, uh low poverty, high growth, you're gonna be okay. Yeah. This is all I know how to do. I can either do this or I can go retire. Like this is so it's not like, you know, and so where I'm sitting at, I think if I do nothing, um that's a bigger problem, probably.

Fixed Ops Growth And New Headwinds

Jim Fitzpatrick

Sure, sure. Is fixed ops uh and then the stores all doing well because of the age of vehicles on the road today and affordability is keeping people from the showroom, so they're holding on to their cars. I'm assuming your fixed ops department, like many others, is doing pretty good.

SPEAKER_01

Yeah, so yeah, that's one thing we do well uh in my company for sure, is we do a good job running service departments by and large. And um we had year over year repair order growth, uh revenue growth, our shop hour growth, every measurable growth factor you could have over the last several years. Q1 this year um was flat to down slightly and fixed. Um you know, I read a report um from Asbery's earnings call, and they said the same thing. So it made me feel better. But I've privately pass the coffee talk, I've had other people say, like, yeah, I've seen the same thing. Yeah now, Q2, you're seeing uh a lift. Uh why is that? Man, I don't know. Yeah, you know, yeah, I I don't know. I mean, look, there's a lot of compelling reasons not to go buy a car. Yeah. There's a war, yeah, right? There's gas prices. Gas prices, the the cost of the products are very high. Sure. But uh the age of the fleet, I've heard this multiple times. You just mentioned that in the United States, it's the highest it's ever been in in modern times. Yeah. That should mean good things for fixed operations, and we're seeing we're deep, we are seeing that. Yeah.

Jim Fitzpatrick

Okay. Okay.

Chinese Cars And A $17K Shock

Jim Fitzpatrick

Yeah. Um, in in terms of uh affordability, which is a uh obviously a big factor everybody's trying to deal with, um, it seems as though the Chinese have an answer to this. What's your take on the the notion that the Chinese vehicles would come or not come into the U.S.? Obviously, we've interviewed uh Senator Moreno on this channel a number of times and he's dead sent against it. He's put a bill forth in the in uh the Senate to to ban Chinese vehicles. Where do you stand on that?

SPEAKER_01

I think Senator Moreno is correct. And you know, two things can be true at the same time, Jim. If you bring Chinese vehicles here, will people buy them? Yeah. Yes, yeah. If you price a car at $17,000 in Metro New Orleans, I could call it the Jeffrey Dahmer edition. Guess what? We will sell every one of them. Right, right. Because at the end of the day, ideology and practicality are sort of separate issues. So you'd sell every vehicle, uh, you'd probably also have catastrophic consequences um to the industry. Yeah. Yeah, and I think that's what they're most afraid of for a lot of people out of jobs. Yeah. Um, and look, you don't have to incident a marino, I haven't heard him speak. I I I know I know the man, he's a good, he's a good man, yeah and a very good politician. But um I think he's mentioned this. We don't really have to guess. There's evidence. Go look at other countries. Yeah, for sure. Yeah. Germany, for instance. Yep. Audi's closing points, laying off 100,000 people. You don't think if you bring, you know, broadline Chinese vehicles to America, what do you think happens to the Ford plant? Yeah. The Silantis plants, the General Motors plants, even the non-union plants in the South. Yeah.

Jim Fitzpatrick

What about the what if they put guardrails in place, though, and they said, okay, we're only going to allow 200,000 vehicles in? Would would you be open to anything like that?

SPEAKER_01

I mean, that's how everything starts. I don't think so. You let them in, they they get their foot in the door and make a hundred off-color jokes about it. But yes, no, I don't think that I think you either are for it or against it. I think it's like anything else. And this is this is to me, this is the gray area. Yeah. If Chinese car manufacturers want to sell their product to North America, fine. Yeah. We have 850 acres in North Louisiana that they can go buy and go spend four billion dollars and go build a plant and hire a bunch of people from Rapids Parish to go build the cars. Right. But I think that sort of nullifies the advantage in the Chinese

Why Pre-Owned EVs Are Moving

SPEAKER_01

cars.

Jim Fitzpatrick

So let me let me move on then to um to the to the current landscape in terms of uh EVs. Have you have you realized any kind of an increase in in the demand for EVs because of gas prices on your stores?

SPEAKER_01

No, but you're seeing it in pre-owned EVs. Okay. Um I have heard that. Yeah. Yeah. That seems to be yeah. Yeah. So I think again, if it's if you're making decisions over stuff like that, if over practical or trying to achieve value, yeah. You're in the pre-owned market, and then in the pre-owned market, an electric vehicle pre-owned is feels like way less stepping out there than a new one. You know, the main way they sell the new ones is to is leasing them, mainly, you know, broadly. And um that's kind of a market-by-market thing. You know, leasing a vehicle in Detroit is looked, you know, all your neighbors do it, your mom did it. The people in South Mississippi or Metro, New Orleans, they'd rather walk. Yeah. You know what I mean? They don't want to do it for whatever the reason. Yeah. So um interesting. Pre-owned EVs is a good compromise to that. So yeah, you're seeing increased value, values out of that, and you're also seeing increased inquiries in demand.

Jim Fitzpatrick

Yeah. Originally I would speak to dealers and they say, well, we we take them on trade, but we're not buying them per se. Um, although that's kind of been changing. Are you now actively buying EVs for your used car lots? We we have been.

SPEAKER_01

I mean, I I was a person. Um I wanted to turn a center, a shopping center next to one of my car dealerships into uh an electric only. I was gonna call it the electric outlet, like with a plug with the outlet on the side.

Jim Fitzpatrick

Yeah, yeah, sure, sure.

SPEAKER_01

And you just gave that idea to a lot of dealers.

Jim Fitzpatrick

That's a great idea, by the way.

SPEAKER_01

Well, I couldn't pull it off. I don't have the people.

Jim Fitzpatrick

Yeah, really.

SPEAKER_01

Who's gonna run that? Yeah. Who? Okay, right. Yeah, I have nine dealerships in sort of South Luton, the Gulf Coast. You know. Yeah. But that's that there's there's not I don't have excess people to go put over here. Right, right. But it would have worked, though, because it's something that no, you know, like nobody did it. So I think if you do something where nobody else is doing it, I think you have a high odds of it being successful. So that would have worked. Yeah. So we've been buying them the whole time opportunistically, um, where there's value buying them, but um, some of the value is creeping out now as the prices go up.

Nissan And Stellantis Through A Regional Lens

Jim Fitzpatrick

Right, right. You've got a couple of um uh what was considered challenged franchises uh with Nissan and Stellanis, right? Um how are you feeling about those stores?

SPEAKER_01

It's a weird conversation because you know, I to be clear, I have two Nissan stores. Yeah. Both of them were respectively the largest ones in their respective states last month. Wow, yeah. Okay. Both of them, you know, uh look, dealers make a lot of money all over the place. Like both of them do well. Let's call it that. Okay. Um Stillantis, I have two. Really, you know what I mean? You know, so I have Baton Rouge in Dallas, Texas, and um and the one in Baton Rouge is probably the most profitable dealership in my entire career. No kidding. Wow, okay, so you follow. Wow, some of them I have are good ones, as you know. And uh I think so, I think these brands are regional, you know. Um and I think if you buy, you know, I think it's more nuanced than that. Like I think if you buy a car franchise, whether it's Kia, Chevrolet, Ford, Chrysler, or Nissan, in a town where there should be maybe two, and there's one, yeah, you're gonna do fine. Yeah, you're gonna do fine. Yeah. I buy stuff counter-cyclical, I buy brands. So I'm going into big markets, I'm going into Dallas, Houston will be next, Fort Worth. Yeah, okay. Huge car market, yeah, metro markets. But I can't go buy Toyota dealerships. Okay. Yeah. I could, I could bet the company. But as long as the publicly traded companies are trading, I mean, you saw yesterday, like their all-time record earnings, their price to earnings, you know, are are well above the historical norms. That's right. You know, Lithia or Asbury or one of these group one can go buy a Toyota store and pay 10 times. Right, right. If their stock is trading at 14, that's that's a pretty good math equation. Sure. But I can't. Yeah. I can't, you know what I mean? So that's why you see the alternations and the lithias, they're buying these Toyota stores, Mercedes stores. Sure. You know, because it's a great time for them to do it. If their stock was trading at 10 times, it would be a lot harder. Yeah, it's like play money. They have to stop doing that, yeah. So guys like me and others can go buy those sort of brands and assets. Um, so what I do typically is I buy brands that are kind of counter-cyclical. So Chrysler, I think the bottom for Chrysler was in 2024. Okay. Um, in 2025, they started bringing back some of the product they had terminated under Tavares. Right. So you bought a yeah, you're gonna sell 10% more cars if you're a Chrysler dealer anywhere in America. Yeah. I guess the difference if you're a small rural town and you're selling 30, you're gonna sell three more. Yeah. If you're selling 140 of them already, then you're gonna sell 140 or whatever you're gonna sell. Yeah. Um, so I think they've hit the bottom in 24 and have started coming back up. Okay. I think you won't reach what they are until probably middle 28. Um Nissan, same thing. I mean, look, Nissan's in my in my opinion, in a really good spot. Like, give me any car manufacturer that would like to say this. This time next year, Nissan will sell 90 plus percent, 95% of what they sell in the United States will be made in Smyrna, Tennessee, and Jackson, Mississippi. No kidding, 95%. That's yes. Wow. Like a far, far. They have a rogue that's coming out, which is a gas and hybrid edition rogue that I've seen a lot of product launches. And I'm not a big product guy. I'm not like one of those guys, like, look at the well. I you know, I don't, that's not my thing. It's not you. But when I see stuff that's like a winner, it's like, oh, that's a winner. Yeah, it's gonna be a huge winner. Yeah. So they're making all this stuff domestically in non-union shops in the south. They're not having to pay import tariffs all over the place. Yeah. And they make a product line that's full, you know, small, you know, SUV, medium, large, all that. Um, I think they're really well positioned to to do well. And again, in certain markets, you know, Nissan is one thing in uh Orlando or Houston, and it's a different thing, it seems like, in you know, New England or Pacific Northwest. I don't, you know. Yeah. Yeah. So uh I think both of those are in are in uh position to do to do well moving forward. And I think there's some other brands that nobody talks about. You know, some let's say German luxury brands. If you're gonna import your full product lineup from Munich to North America, I mean, outside of Tehran, I can't think of a worse place to do that. Let's say you went to an 80% product electric strategy a couple years ago and you're importing the cars from Germany or whatever you're doing it at. That's a problem.

Jim Fitzpatrick

Yeah, that is, that is. And and Audi is having a real difficult time of it right now, to say the least. You said it, I didn't say it. No, no, I know.

SPEAKER_01

Will it get fixed? And yeah, will it, but I think that that's one that's gonna, it's just gonna take longer. You know, like when you go to an 80% electric product strategy, you know, putting the horse in the barn is not that easy. Yeah. You know, you sign contract suppliers, batteries. Yeah, oh my god, yeah, no question about it. It's a two, it's really a three-year transition back if you want to take it all back.

Jim Fitzpatrick

Yeah, very good point. Yep. Yeah, yep. Yeah, yeah, you can't slow that train down any anytime.

Buying Counter-Cyclical Brands In Big Markets

Jim Fitzpatrick

Can you share with us the brands that you're picking up here in the next uh couple of months?

SPEAKER_01

They're familiar brands.

Jim Fitzpatrick

They're familiar brands?

SPEAKER_01

They're familiar, yeah. They're familiar brands. Okay, and so I I've kind of gotten to a place where you know it's easier, obviously, to enter some of these big markets I want to be in with brands that are counter-cyclical, like I mentioned.

Jim Fitzpatrick

Yeah.

SPEAKER_01

You know what I mean? Where it's a you know, you're trying to buy them on the way up. Yeah. But once you start talking about, hey, you know, like it's fixed, it's too late now. Now all the guys that own these brands are making money and the prices are too high on them. So I try to find that that value point. Sure. Um, you know, but I'm trying to get it to the point where that'll give me, I think, 15. I'm trying to get it so I don't have one certain brand that's contributing a an oversized amount. Yeah, good, good move, right? Good strategy. 20% kind of would be the max, uh, you know, and then over time maybe diminish from that.

Jim Fitzpatrick

But I don't want one brand to be contributing 60% of the net profit of my particular beyond beyond these next two, more in 2026 in the next by the end of the year, or is that it?

SPEAKER_01

Yeah, no. So like um there's deals that are more available right now than they have been, especially if you're you know, have my philosophy. If it's like, hey, I want to buy Toad in major metro markets, okay. You know, your your swings will be more limited.

Jim Fitzpatrick

Yeah, oh yeah, for sure.

SPEAKER_01

Major metros or suburban fringe parts of major metros, and I'm kind of brand agnostic, you know. But there's some priorities. Honda's a priority, I'd like to have uh other stuff like Subaru, I'd like to add some luxury. Yeah, great franchises. I'd like to add all kinds of stuff, you know, it's just it has to be able to come to me. But I think I've gotten out of my I think I'm gonna end up doing business in the southwest and southeast, and that's probably where I'm gonna be moved

Halftime Mentality And Staying Hungry

SPEAKER_01

forward.

Jim Fitzpatrick

Yeah, fantastic. 12 stores, soon to be 14 stores. Is that what I'm hearing? Right. Incredible, incredible, unbelievable. Uh Matt Bowers, Matt uh, owner of Matt Bowers Auto Group. Thank you so much for spending some time with us here at CBT News. It's always great catching up with you. I know that the industry has been following your success, and it's like, wow, this guy grew fast, and uh you're running a great group. Yeah, it's been 11 years. Um yeah, and look. That's more than a story year. That's a pretty progressive and aggressive strategy plan.

SPEAKER_01

Two things. I think anything is possible if you don't know any better. And um, you know, look, I worked for really good guys too. Like I worked for, if you look at where I came from my resume, like you know, it was like these were serious people I work for, these are the greatest deal makers in history.

Jim Fitzpatrick

That's right.

SPEAKER_01

Um, so I learned a little bit from them. And the last thing is it's hey, look, it's halftime. Yeah, you know what I mean? So like nobody's sizing rings at halftime. That's right. You know, so every day, you know, we have to, you know, protect what we have and go shoot for higher goals. Sure. Or guess what? There's some kid out there right now going, I'm gonna take him down. I'm gonna, you know, like you got to stay ahead of that.

Jim Fitzpatrick

Like you were 15 years ago.

SPEAKER_01

100%.

Jim Fitzpatrick

That's great. Well, keep doing what you're doing. We love watching your growth, and uh, and again, thanks for spending some time with us. I know that our dealer audience will get a lot out of uh the to today's discussion, and uh, and everybody's rooting for you. So thanks so much. Really appreciate it. Appreciate you, bro. Thanks.