Pretty cool little trick you've made there.
With the help of an analytic function, I've fixed the ordering, and as a byproduct it also scales better:
WITH ranked AS (
SELECT make,model,Rank() over (PARTITION BY make ORDER BY model) Rnk
FROM MakeModel
)
,cte (make,models,rnk) AS
(
SELECT Make
,Model Models
,rnk
FROM ranked
WHERE rnk = 1
UNION ALL
SELECT cte.Make
,Models + N' , ' + Model
,r.Rnk
FROM cte
INNER JOIN ranked r
ON cte.Make=r.Make
AND cte.Rnk = r.rnk - 1
)
SELECT Make,Max(Models) models,Max(rnk) cnt FROM cte GROUP BY make ORDER BY make
