Can Berkshire Hathaway Own Auto Dealerships?

Weeks after announcing it wanted to buy Oncor Energy, Berkshire Hathaway indicated it wants to open a Mercedes-Benz franchise in Austin. Berkshire Hathaway Automotive, the Irving, TX-based subsidiary of Warren Buffett’s Berkshire Hathaway Inc., is interested in opening a dealership at 10900 S. Interstate 35. But it’s running into legal problems.

The problem is that Berkshire Hathaway also owns Forest River Inc., an Indiana-based manufacturer of RVs, boats and buses. Texas state law prohibits a company from owning both car dealerships and car manufacturers – even if they are of different makes. That law is why Tesla Inc. can’t open a dealership in Texas. However, Berkshire Hathaway Automotive does have dealerships throughout the Dallas-Fort Worth metro area.

Buffett established his car dealership unit in 2015, when his company paid $4.1 billion to acquire the privately held Van Tuyl Group. He renamed it Berkshire Hathaway Automotive, and moved the headquarters to North Texas.

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