McCombs Automotive

McCombs Automotive

(San Antonio, Texas | 22 Rooftops | ~$2.8 Billion Estimated Annual Revenue)

Overview & Market Position

McCombs Automotive is one of the dominant automotive retail groups in Texas, operating 22 rooftops primarily in the San Antonio and Houston markets. With estimated annual revenues of approximately $2.8 billion, McCombs ranks among the top 20 privately held dealer groups in the United States and is the largest dealer group headquartered in San Antonio. By transaction volume, the group sells somewhere in the range of 35,000 to 45,000 new and used vehicles per year across its two dozen locations.

The McCombs name is synonymous with business success in Texas — not just in automotive retail but across a diversified portfolio of enterprises that includes real estate, oil and gas, media, and professional sports. The McCombs family is one of the wealthiest and most prominent business families in the state, and the automotive group is just one piece — albeit a significant one — of the family's broader business empire. This broader business context shapes McCombs Automotive in ways that distinguish it from other large private dealer groups.

The group's home market of San Antonio is the seventh-largest city in the United States and one of the fastest-growing major cities in the country. The San Antonio-New Braunfels metropolitan area has grown by more than 10% over the past decade, adding over 200,000 new residents. This population growth, combined with a strong economy anchored by healthcare, military (Joint Base San Antonio is the largest employer in the city), tourism, and a growing technology sector, has created sustained demand for new and used vehicles. McCombs is the dominant dealer group in this market, with a market share that likely exceeds 15% of new vehicle sales in the region.

Houston, the other major market where McCombs operates, is an even larger market — the fifth-largest metropolitan area in the country — but McCombs has a smaller relative presence there compared to its San Antonio dominance. The Houston market is intensely competitive, with dozens of dealer groups — including public companies like Group 1 Automotive (headquartered in Houston), Sonic Automotive, and Lithia Motors, as well as large private groups like Mac Haik Automotive and Sterling McCall — all competing for market share.

McCombs Automotive has a reputation as a sophisticated, professionally managed organization that operates more like a large corporation than a traditional family dealership group. The group has invested heavily in its corporate infrastructure, including advanced data analytics, marketing technology, and operational systems, and it has attracted experienced executives from both inside and outside the automotive industry. At the same time, the group maintains the customer focus and community involvement that have characterized the McCombs family's business philosophy for generations.

Company History & Founding Story

The McCombs Automotive story is inseparable from the story of its founder, B.J. "Red" McCombs, who is one of the most successful and colorful entrepreneurs in Texas business history. Red McCombs was born in 1927 in Spur, Texas, a small town in the Texas Panhandle. He grew up during the Great Depression and developed the work ethic and business instincts that would serve him throughout his career. After serving in the U.S. Army Air Corps, McCombs attended the University of Texas at Austin on the G.I. Bill, graduating with a degree in business administration.

McCombs's entry into the automotive business came somewhat accidentally. After college, he worked briefly in the oil and gas industry before taking a job as a car salesman at a Ford dealership in Corpus Christi. He quickly discovered that he had a natural talent for selling cars, and he worked his way up through the ranks of the dealership before striking out on his own.

In the late 1950s, McCombs purchased his first dealership — a Ford franchise in Corpus Christi, Texas. He built the business through hard work and a willingness to take calculated risks that more conservative operators might have avoided. The dealership grew quickly, and McCombs began looking for opportunities to expand.

The 1960s and 1970s were a period of rapid growth for what would become McCombs Automotive. McCombs added dealerships representing multiple brands across South Texas, building a network that stretched from Corpus Christi to San Antonio to the Rio Grande Valley. He also began diversifying into other business ventures, including real estate development, oil and gas exploration, and radio broadcasting.

McCombs's business philosophy was shaped by his experience growing up during the Depression. He believed in the importance of hard work, financial discipline, and long-term thinking. He was known for his competitive nature — a trait that would serve him well in business and that he famously applied to other endeavors, including his ownership stakes in professional sports teams.

In the 1980s, McCombs made his most famous business move outside of automotive retail: he became the majority owner of the San Antonio Spurs of the National Basketball Association. Under McCombs's ownership, the Spurs won their first NBA championship in 1999. McCombs also owned the Minnesota Vikings of the National Football League from 1998 to 2005, making him one of the few individuals to have owned franchises in both the NBA and NFL. His ownership of the Spurs was particularly noteworthy because he made a conscious decision to keep the team in San Antonio rather than relocating it to a larger market — a decision that cemented his legacy as a civic leader in the city.

McCombs Automotive continued to grow throughout the 1980s and 1990s, expanding its brand portfolio and its geographic footprint. The group added luxury franchises including BMW, Mercedes-Benz, Lexus, Porsche, and Audi, positioning itself to serve the growing demand for premium vehicles in the Texas market. It also expanded its domestic brand representation, adding Chevrolet, GMC, Buick, Cadillac, and other General Motors brands, as well as continuing its long relationship with Ford.

The 2008-2009 financial crisis was a challenging period for McCombs Automotive, as it was for all dealer groups. However, the group's financial strength and its diversified brand portfolio helped it weather the storm. Following the recession, McCombs capitalized on the consolidation that swept through the dealer body, acquiring multiple dealerships from owners looking to exit the business.

Red McCombs gradually stepped back from day-to-day management of the automotive group in the 2000s, though he remained actively involved in strategic decisions and maintained his role as chairman emeritus until his passing in 2023. His son, D.J. McCombs, took over leadership of the automotive group, along with other McCombs family business interests.

Red McCombs passed away in February 2023 at the age of 95, leaving behind a legacy as one of the most successful and influential automotive dealers in American history. The automotive group he founded continues to operate under the leadership of his family and a professional management team that remains committed to the principles he established.

Leadership & Ownership Structure

McCombs Automotive is owned and operated by the McCombs family, with leadership now passing to the second and third generations following Red McCombs's passing in 2023.

D.J. McCombs, Red's son, serves as Chairman of McCombs Automotive and oversees the family's broader business interests, which include the automotive group, real estate holdings, oil and gas investments, and other enterprises. D.J. has been involved in the family businesses for decades and has played a key role in guiding the automotive group's growth and strategic direction.

Day-to-day operations of McCombs Automotive are led by a professional management team that includes experienced automotive retail executives. The group has a President or CEO who oversees the entire automotive operation, supported by a corporate team that includes a CFO, a Chief Marketing Officer, regional vice presidents, and department heads for areas like fixed operations, variable operations (sales), and human resources.

Each dealership has a general manager who is responsible for the store's P&L. McCombs has a reputation for hiring experienced, professional GMs and giving them significant autonomy to run their stores. The corporate team provides support in areas like marketing, finance, and human resources, but GMs are expected to be entrepreneurial leaders who drive performance at their individual stores.

The group's management philosophy reflects Red McCombs's belief in hiring the best people and giving them the authority to do their jobs. This decentralized approach has served the group well, allowing it to attract and retain talented executives who might otherwise be drawn to larger public companies. McCombs Automotive has been able to compete for top talent by offering competitive compensation, significant responsibility, and the stability of a family-owned organization.

The group's corporate team includes specialists in key areas that support the dealership network. The marketing department develops brand strategy, manages digital marketing campaigns, and coordinates advertising across the group's stores. The finance department handles accounting, financial reporting, and floor plan management. The human resources department manages recruiting, training, benefits administration, and compliance. The IT department supports the technology infrastructure that powers the group's operations.

McCombs Automotive has also developed a strong in-house training and development function. The group operates its own training programs for salespeople, service technicians, and managers, designed to ensure that employees at all levels have the skills and knowledge they need to succeed. This training investment is particularly important in the current labor market, where qualified automotive technicians and sales professionals are in high demand.

The group's ownership structure reflects the broader McCombs family's approach to business. The automotive group is owned by the McCombs family, with multiple family members holding ownership stakes. The family has established governance structures — including a family council and a board of advisors — to manage the intersection of family interests with business interests.

McCombs Automotive benefits from being part of a larger family enterprise with diverse business interests. The family's real estate holdings, for example, provide opportunities for dealership development that other dealer groups might not have. The family's financial resources also provide a capital base that can be deployed to support the automotive group's growth.

Geographic Footprint

McCombs Automotive operates 22 rooftops across two major Texas markets: San Antonio and Houston. The group also has its headquarters in San Antonio, where the majority of its dealerships are located.

San Antonio: McCombs is the dominant dealer group in the San Antonio market, operating a significant number of rooftops representing most major automotive brands. The group's San Antonio operations include multiple locations along major thoroughfares like Interstate 10, Loop 410, and Highway 281. The San Antonio dealerships serve not only the city of San Antonio itself but also the surrounding communities in Bexar County and the broader South Texas region.

Houston: McCombs operates a smaller number of dealerships in the Houston market, focused primarily on luxury and high-volume import brands. The Houston operations are concentrated in the western and northwestern suburbs, including areas like Katy, Sugar Land, and The Woodlands, where population growth has been strongest. The Houston market is highly competitive, and McCombs's position there is more modest than its dominant position in San Antonio.

The group has historically concentrated on the Texas market and has not shown significant interest in expanding outside the state. This focus on Texas makes strategic sense given the state's strong population growth, favorable business climate, and the McCombs family's deep roots in the state.

McCombs Automotive benefits from the extraordinary growth of the Texas economy. Texas added more than 4 million residents between 2010 and 2020, and the state continues to grow at a rapid pace. San Antonio and Houston are among the primary beneficiaries of this growth, with both cities adding population through a combination of domestic migration and international immigration.

Brand Mix & OEM Relationships

McCombs Automotive's brand portfolio is one of the broadest among private dealer groups of comparable size, encompassing luxury, mainstream import, and domestic brands across its 22 rooftops.

Luxury & Premium Brands:

• BMW — Multiple locations, including both BMW and BMW Motorcycles franchises
• Mercedes-Benz — Represented in both San Antonio and Houston
• Lexus — Represented in the San Antonio market
• Porsche — Represented in San Antonio
• Audi — Represented in San Antonio
• Cadillac — Represented in San Antonio
• Acura — Represented in San Antonio
• Volvo — Represented in at least one market
• Genesis — Represented in some markets

Mainstream Import Brands:

• Toyota — Multiple locations in San Antonio and Houston; Toyota is one of McCombs's most important brand relationships
• Honda — Multiple locations in San Antonio and Houston
• Nissan — Represented in San Antonio
• Hyundai — Represented in San Antonio
• Kia — Represented in San Antonio
• Subaru — Represented in San Antonio
• Mazda — Represented in San Antonio
• Volkswagen — Represented in at least one market

Domestic Brands:

• Ford — Represented in connection with the group's historical roots
• Chevrolet — Represented in San Antonio
• GMC — Represented in San Antonio
• Buick — Represented in San Antonio
• Chrysler, Dodge, Jeep, Ram — Represented through multiple locations

Other:

• Mitsubishi — Represented in some markets
• FIAT — Represented historically

This broad brand portfolio gives McCombs significant diversification across price points, customer demographics, and OEM product cycles. The group's luxury brands generate higher per-vehicle profits and attract customers who are more likely to return for service, while its mainstream brands provide volume and drive service bay utilization.

McCombs's relationship with Toyota is particularly important, given Toyota's strong market position in Texas and the profitability of Toyota franchises. The group's relationship with BMW is also significant, with McCombs operating multiple BMW stores that are among the brand's highest-volume and highest-rated locations in Texas.

Business Strategy & Growth

McCombs Automotive's business strategy is built on a combination of operational excellence, brand diversification, and the advantages that come from being part of a larger family business enterprise.

1. Operational Sophistication: McCombs has invested heavily in building a professional corporate infrastructure that rivals that of publicly traded dealer groups. The group uses advanced data analytics to track performance metrics across its stores and to identify opportunities for improvement. It has invested in its marketing capabilities, using sophisticated digital marketing tools to generate leads and drive traffic. It has also invested in its human resources and training systems, developing programs that attract, develop, and retain talent.

2. Brand Diversification: McCombs's broad brand portfolio provides diversification across the automotive market. The group is not overly dependent on any single OEM or market segment, which provides stability through economic cycles and industry disruptions.

3. Real Estate Strategy: McCombs benefits from the McCombs family's significant real estate holdings and expertise. The family has developed numerous properties in San Antonio and other Texas markets, and the automotive group has access to prime locations that might not be available to other dealers.

4. Family Enterprise Advantages: McCombs Automotive benefits from being part of a larger family business enterprise with diverse interests. The family's financial resources provide a capital base that can support the automotive group's growth, and the family's connections in business and politics provide advantages that are difficult to quantify but real.

5. Customer Service Focus: McCombs has built its reputation on customer service, and the group tracks customer satisfaction metrics closely. The group has invested in its facilities and its team to ensure that customers have a positive experience at every touchpoint.

6. Conservative Financial Management: The McCombs family has historically maintained conservative financial management across all of its business interests. The automotive group carries manageable debt levels and maintains significant financial reserves.

The group's growth trajectory includes:

• 1950s-1960s: Single Ford store in Corpus Christi, expansion to San Antonio
• 1970s-1980s: Multi-brand expansion, addition of luxury franchises
• 1990s: Continued growth, Houston market entry
• 2000s: Facility investments, brand portfolio expansion
• 2010s: Post-recession acquisitions, digital investments
• 2020s: Record profitability, continued selective growth

Facility Investments & Real Estate Strategy

McCombs Automotive's approach to real estate and facilities is one of its distinguishing characteristics. The McCombs family has a deep background in real estate development — the family's holdings include office buildings, shopping centers, apartment complexes, and industrial properties across Texas. This real estate expertise gives McCombs Automotive a significant advantage in site selection, facility design, and construction management.

The group owns the majority of its dealership real estate, which provides several strategic benefits. First, owning real estate gives McCombs control over facility quality and timing — the group can make improvements when it chooses without needing landlord approval. Second, real estate ownership provides an appreciating asset base that contributes to the group's overall financial strength. Third, owned real estate eliminates the risk of lease expiration or rent increases that can squeeze dealers who lease their facilities.

McCombs has invested tens of millions of dollars in facility upgrades over the past decade, renovating existing stores and building new ones to meet the increasingly demanding facility standards imposed by OEMs. These investments have been particularly significant at the group's luxury-brand stores, where OEM facility requirements are most stringent. The group's BMW, Mercedes-Benz, Lexus, and Porsche stores have all undergone significant renovations in recent years.

The group's real estate expertise extends to site selection for new dealerships. McCombs has been able to identify and acquire prime locations in growing areas of San Antonio and Houston, often before competitors recognize the potential of these areas. This ability to secure premium locations at reasonable prices is a competitive advantage that is difficult to replicate.

Technology & Digital Retailing

McCombs Automotive has invested in technology across its operations, reflecting the group's sophisticated approach to business management.

DMS (Dealer Management System): McCombs has standardized on a DMS platform that supports its multi-store operations, though the specific platform has not been publicly confirmed. The group uses its DMS to track inventory, manage customer data, and monitor financial performance across its network.

CRM (Customer Relationship Management): The group uses CRM technology to manage customer interactions and to support its marketing efforts. McCombs has invested in integrating its CRM with its DMS and its website to provide a seamless customer experience across channels.

Website & Digital Retailing: McCombs's dealership websites offer comprehensive digital retailing capabilities, including online inventory browsing, build-and-price tools, online credit applications, trade-in valuation, and service scheduling. The group has invested in its online sales capabilities, allowing customers to complete much of the purchase process online.

Digital Marketing: McCombs has invested heavily in digital marketing, using search engine marketing, social media advertising, and targeted display advertising to generate leads. The group has developed sophisticated marketing analytics capabilities that allow it to measure the effectiveness of its marketing spend and to optimize its campaigns.

Service Technology: McCombs's service departments use digital inspection tools, video communication platforms, and online scheduling to improve the customer experience in the service lane.

Community Involvement & Philanthropy

McCombs Automotive and the McCombs family have a long history of community involvement and philanthropy, particularly in San Antonio where the family has been a cornerstone of the business community for decades.

Education: The McCombs family has been a significant benefactor of educational institutions. Red McCombs was a major donor to his alma mater, the University of Texas at Austin, where the McCombs School of Business bears his name following a $50 million donation in 2000. The family has also supported other educational institutions in Texas.

Professional Sports: Red McCombs's ownership of the San Antonio Spurs helped establish the Spurs as a fixture in San Antonio's civic life. His decision to keep the team in San Antonio rather than moving it to a larger market is widely credited with helping to establish the city's identity and with catalyzing downtown development.

Local Community: Individual McCombs dealerships support local organizations in their communities, including schools, sports teams, and nonprofits. The group encourages this local engagement as part of its commitment to being a good corporate citizen.

Healthcare: The McCombs family has supported healthcare institutions in San Antonio and elsewhere, including hospitals and medical research organizations.

The McCombs family's philanthropic approach is characterized by large, transformational gifts — the $50 million donation to UT Austin is a prime example — rather than spreading resources across many smaller causes. This approach reflects the family's business philosophy: make significant commitments where you can make a real difference.

Beyond the headline-grabbing gifts to the University of Texas, the McCombs family has been a consistent supporter of San Antonio institutions. The family has contributed to the San Antonio Museum of Art, the Witte Museum, the San Antonio Food Bank, and numerous other organizations that serve the community. The family's support for the San Antonio Spurs — both during Red McCombs's ownership and after — helped establish the Spurs as a pillar of the San Antonio community and contributed to the team's role in unifying the city.

McCombs Automotive dealerships participate in local community events throughout the year, including sponsorship of youth sports teams, support for local school programs, and participation in charitable drives. The group encourages its employees to volunteer in their communities and supports those efforts through paid time off and corporate matching programs. This local engagement is coordinated at the store level, with each general manager having the discretion to support causes that matter most in their specific community.

The group also supports the broader automotive industry through participation in industry organizations and events. McCombs has been a member of the Texas Automobile Dealers Association and the National Automobile Dealers Association for decades, and the family has contributed to industry advocacy efforts on issues ranging from franchise laws to emissions regulations.

Recent News & Developments

McCombs Automotive has been in the news for several significant developments in recent years.

Passing of Red McCombs (2023): The passing of founder B.J. "Red" McCombs in February 2023 marked the end of an era for the automotive group and for the broader Texas business community. McCombs was 95 years old and had been active in business until late in his life. His passing was widely covered in the Texas media, and his legacy as a business leader and philanthropist was extensively celebrated.

Leadership Transition: Following Red McCombs's passing, the leadership transition that had been underway for years was formalized. D.J. McCombs took on increased responsibilities as Chairman of the automotive group and the broader McCombs family enterprises. The group's professional management team continued to handle day-to-day operations.

Facility Investments: McCombs has invested in facility upgrades across its network, including the renovation of several San Antonio stores and the development of new facilities to meet OEM standards.

Digital Investments: The group continued to invest in its digital retailing capabilities, adding features to its online sales platform and improving its digital marketing capabilities.

Acquisition Activity: McCombs has been selective in its acquisition activity, adding dealerships when good opportunities have arisen in its existing markets.

Competitive Position & Outlook for 2025-2026

McCombs Automotive enters 2025 with significant competitive advantages and the momentum of strong market conditions in Texas.

Competitive Advantages:

1. Dominant San Antonio Position: McCombs is the clear market leader in San Antonio, one of the fastest-growing major cities in the United States. This position provides significant advantages in brand awareness, customer loyalty, and OEM relationships.

2. Strong Brand Portfolio: McCombs's diverse brand portfolio provides stability and growth potential. The group is well-positioned to capture demand across price points and customer segments.

3. Sophisticated Operations: McCombs's investment in corporate infrastructure, data analytics, and professional management gives it operational capabilities that many private dealer groups lack.

4. Family Enterprise Resources: The broader McCombs family enterprise provides financial resources, real estate expertise, and business connections that give McCombs Automotive advantages over standalone dealer groups.

5. Texas Market Growth: The Texas market continues to grow rapidly, with population growth driving demand for new and used vehicles. McCombs is well-positioned to benefit from this growth.

Key Challenges:

1. Loss of Founder: Red McCombs's passing in 2023 removed the founding leadership that had guided the group for over six decades. While the leadership transition had been planned for years, the loss of the founder is always a significant moment for a family business.

2. Competition in Houston: The Houston market is highly competitive, and McCombs has a smaller presence there than in San Antonio. Growing the Houston operations will require significant investment and execution capability.

3. Valuation Environment: The elevated valuation environment for dealership acquisitions makes growth through acquisition more expensive.

4. EV Transition: The pace and direction of the EV transition remain uncertain, creating challenges for dealer investment planning.

5. Talent Retention: Competition for automotive retail talent remains intense, particularly in growing Texas markets.

Outlook:

McCombs Automotive is well-positioned for continued success through 2025-2026. The group's dominant position in the San Antonio market, its diversified brand portfolio, and the resources of the broader McCombs family enterprise provide a strong foundation for growth.

Key areas to watch:

• Post-Founder Leadership: The group's ability to maintain its momentum and its culture following Red McCombs's passing will be a key test of the leadership team and the succession planning that was put in place over the preceding years.

• Houston Expansion: McCombs's ability to grow its Houston operations will be an important driver of the group's growth trajectory. The Houston market offers significant opportunities but also intense competition.

• Brand Portfolio Optimization: McCombs may need to rationalize its brand portfolio as OEMs consolidate their dealer networks and as the industry transitions toward electric vehicles.

• Digital Transformation: The group will need to continue investing in digital retailing to meet evolving consumer expectations and to compete effectively with digitally native competitors.

In summary, McCombs Automotive is one of the most successful and respected dealer groups in Texas and in the United States. With 22 rooftops, approximately $2.8 billion in annual revenue, and a dominant position in the San Antonio market, the group enters 2025 with strong fundamentals and a clear strategic direction. The group's combination of operational sophistication, brand diversification, and family enterprise resources positions it well for continued success.