Dealership consolidation is expected to accelerate as Warren Buffett's entry into automotive retailing attracts more buyers, observers said. But don't expect massive change anytime soon.

It will be a decadelong process, Steven Szakaly, chief economist for the National Automobile Dealers Association, predicted.

About 4 percent of U.S. dealerships are held by publicly traded companies, NADA Chairman Forrest McConnell said, leaving 96 percent up for grabs in the buy-sell arena.

George Hoffer, an economics professor at the University of Richmond in Richmond, Va., said that with 18,000 or so dealerships in the United States, true consolidation cannot occur within "a middle-aged person's lifetime."

Szakaly said consolidation of stores provides economies-of-scale advantages that can ease regulatory compliance and improve back-office operations such as human resources and financing. But despite those advantages, he said, even the largest public dealership groups seem to find it "very, very difficult to get above 300 dealerships."

This month, Buffett's Berkshire Hathaway Inc. investment company agreed to buy Van Tuyl Group, of Phoenix, the nation's fifth-biggest dealership group and the largest privately held one. The deal involves 78 dealerships and is expected to close in the first quarter of 2015, subject to manufacturer approval. The group will be renamed Berkshire Hathaway Automotive and, Buffett said, will buy more stores.

Buffett's purchase of Van Tuyl Group is seen by many as a stamp of approval that will speed the pace of dealership consolidation.

"We now have a very big buyer out there who is going to continue to buy dealerships, and I think they're going to be much more acquisitive than the publics," said Erin Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif. "That is the mandate."

But, Hoffer said, interested outsiders must come bearing lots of money.

Automotive retailing is an industry "protected" by state franchise laws and a massive cost of entry that keeps other competitors out, he said.

NADA Chairman Forrest McConnell: Ninety-six percent of stores are up for grabs.

"With blocked entry, the only way to get in is to bid up the price of existing dealerships, so it requires more and more capital to get in," Hoffer said. "The days of the Ma and Pa entering this business -- unless it's in a rural area -- those days are effectively over." 

On the other hand, Buffett's purchase implies smaller dealers can have a growth and exit strategy. Adam Hayford, pre-owned director at Golling Chrysler-Dodge-Jeep-Ram in suburban Detroit, said Berkshire Hathaway's acquisition of Van Tuyl Group provides hope to smaller dealership groups that they can grow and attain enough critical mass to attract outside investors of Buffett's caliber. 

"You see a path where you can acquire others and eventually sell as a package," said Hayford, speaking on the sidelines of vAuto's Access: Velocity conference in Chicago. 

Van Tuyl Group CEO Larry Van Tuyl expects consolidation to accelerate in the wake of his company's sale to Berkshire Hathaway. That will mean growth for his group, which he expects to generate $9 billion in sales this year. 

He said foreign investors were among the outside buyers who approached him over the years about buying his group. 

"I believe you'll see other great capital come to the automotive markets," Van Tuyl said. "It'll be from in our country, out of our country. It will be from everywhere. I'm very confident of that." 

David Barkholz and Jamie LaReau contributed to this report; article...