Group One CEO says "bullish on Ford"

DETROIT (Reuters) - Group One Automotive Inc (GPI.N), the No. 4 U.S. auto dealership, has been looking at possible acquisitions over the past few months and would consider buying more Ford Motor Co (F.N) dealerships, the company's chief executive, Earl Hesterberg, said on Monday.

The Houston-based retailer has been more of a seller of dealerships than a buyer lately as it aggressively cut costs to adjust to the weak market, but it is now in a position to make some strategic deals, said Hesterberg.

"We're pretty bullish on Ford," he said at the Reuters Autos Summit.

"We would consider purchasing a Ford dealership if it were in a market where we thought we could grow that business."

Ford on Monday reported $1.3 billion of positive cash flow in the third quarter, its first positive quarter since the second quarter of 2007, and it forecast positive cash flow in the fourth quarter. It burned through $4.7 billion of cash in the first half of 2009. ID:N02411585

Hesterberg added that Group One is not considering buying any General Motors Co or Chrysler dealerships.

Chrysler needs to get some new products to the market as quickly as possible to generate some revenue and some fresh cash flow for the company, he said.

As far as GM is concerned, Hesterberg said he is optimistic about Chevrolet, and GM is looking a bit better in terms of new product on the way, but it still has to finish sorting out its management team.

Ford dealerships make up 8 percent of Group One's dealership sales. Toyota (7203.T) dealerships lead the way for Group One's sales, at 39 percent, followed by Nissan(7201.T), 14 percent; Honda Motor (7267.T), 12 percent; BMW/Mini (BMWG.DE), 9 percent; Ford, 8 percent; Chrysler, 4 percent; and GM, 3 percent.

Toyota, which has not escaped the challenges presented by the steep decline in the auto sector, is still a strong bet going forward, said Hesterberg.

"I don't spent one minute of time worrying about Toyota," he said. "I have no doubt they'll work through these challenges and come out more successful than they have been in the past."

Hesterberg said Ford's strategy to reduce its inventory early on was "a critical factor in what they've been able to accomplish."

"When they stopped jamming vehicles on us, that really gave me a big confidence boost in where they were heading." (Reporting by John McCrank; Editing by Gary Hill)