CLEVELAND -

With plenty of liquidity, the ability to generate cash and ideal financing conditions pushing buyers to make moves, KeyBanc Capital Markets says merger and acquisition activity in the dealership world “remains highly active.”

So expect dealership acquisitions to continue, the company said, which along with robust used-car and parts and service sales should lead to continued growth in the profitability of the retail car business.

Sharing its longer-term forecast for 2015 and 2016 as part of an analysis on its most recent dealer survey, KeyBanc said that “we remain positive on earnings growth for the automotive retail industry, primarily driven by used vehicles and parts and service sales, and accretive acquisitions.”

As the third installment of our series recapping each of those three factors described by KeyBanc, we share more about what the company had to say about M&A activity.

“Buyers are largely driven by their abundant liquidity positions, strong cash generation and low financing rates,” KeyBanc analysts said.

“Management teams of Asbury Automotive, Lithia Motors, Penske and Group 1 Automotive, as well as Warren Buffett and George Soros have reiterated their continued interest in growing operations through acquisitions,” they added.

Just over two weeks ago, Group 1, for example, announced the purchase of Prestige Audi in North Miami Beach, Fla.

Lithia, meanwhile, had a fairly busy year for acquisitions in 2014, and said in its full-year and fourth quarter 2014 earnings release in February that the market continues to buzz.

The company got 2015 rolling by opening Subaru of Clearlake, Texas in January.

“We significantly increased the size of Lithia in 2014, adding annualized revenues in excess of $2.7 billion. We acquired 35 stores and opened one franchise in 2014, and are pleased to have already opened a new store in the Houston, Texas market with Clearlake Subaru,” president and chief executive office Bryan DeBoer said in the release.

“The acquisition market remains active and we continue to seek domestic, import and luxury franchises in cities ranging from mid-sized regional markets to metropolitan markets across the United States,” he added.