American business mogul Warren Buffett begins his trek into the automobile industry by acquiring the Van Tuyl Group, one of the largest private automotive dealers in the United States.

Warren Edward Buffett, Berkshire Hathaway's Chief Executive Officer and biggest shareholder, had decided to take on a new path as he sees the acquisition of the fifth largest auto retailer in the U.S. as the best way to launch a consolidation of his highly fragmented business.

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According to the Wall Street Journal, the Berkshire Hathaway would buy around $8 billion worth of retail businesses from Florida to California and unite his family-owned business.

Based in Phoenix, Arizona, the automotive dealership company will soon be known as Berkshire Hathaway Automotive which will provide other Berkshire acquired businesses with financing, car sales and other related services.

This is also expected to direct the automotive services and retailing industry into a more advantageous set up when it comes to cost and pricing.

Aside from that, the newly-acquired company highly compliments Berkshire's Geico insurance unit, with the add-on "key policy shopping juncture," as Keefe Bruyette & Woods analyst Meyer Shields said.

Known to be one of the most successful investor in the 20th century, some analysts believe that Buffett is attracted to the industry because of the dealer sector.

"What may have attracted Buffett to the business is that the dealer sector ... is the best part of the automotive supply chain from a competitive advantage perspective, with all the publicly traded firms having developed narrow economic moats around their operations," Greggory Warren, an analyst for the Morningstar, wrote on Thursday.

Van Tuyl Group Incorporated, a family-propagated business initiated by Cecil Van Tuyl in 1955, has been reported to have around $9 billion profit yearly from its 78 dealers and will be based in Dallas by 2015. 

Tagsautomobile, Warren Buffett, dealer, car, van tuyl group