AUTOMOTIVE Holdings Group (AHG) yesterday expanded its presence in NSW’s Newcastle region by acquiring the Hunter Motor Group (HMG) from its three shareholders for $8.5 million goodwill plus stock.

The expansion into the burgeoning Hunter Valley area brings AHG’s locations to 11 and lifts its employee numbers to about 600 from 520. AHG now has 185 automotive franchises in Australia and New Zealand.

It also adds a Honda and Volkswagen franchise for the first time in the area, a third Subaru showroom and a second Isuzu Ute franchise. HMG will also rent to AHG its newly-renovated showrooms, parts warehouses, storage centres and workshops to the inventory.

AHG managing director John McConnell said the acquisition was “a valuable addition” and “is aligned to our automotive growth strategy to acquire and aggregate dealerships in and around existing AHG dealerships”.

HMG – based in Maitland and Rutherford, which are inland from Newcastle – started in 2000 when Rob Dawes and two partners bought an existing Honda and Subaru showroom.

Mr Dawes, speaking exclusively to GoAutoNews Premium, said the business grew rapidly in line with the area’s population growth and Honda and Subaru’s sustainable brands and expanding business development.

“We bought the business because we could see the future potential in the area and the sustainable brands,” he said.

“It has grown enormously since we bought it in 2000 and that led us to expand and buy more land to accommodate the business growth.”

Soon after its purchase, Subaru and Honda were relocated into a dedicated facility.

“Then, as the business grew, we expanded the Subaru showroom and built a new showroom in 2004 specifically for Honda,” Mr Dawes said.

“In 2007, again as business grew, we bought the land across the road for a stand-alone Honda dealer.”

The partners added the Volkswagen franchise, then later that year added Isuzu Ute.

“We then needed to find land for storage so we decided to put that into Rutherford, about 10 minutes away,” Mr Dawes said.

“That site including the service centre then became a commercial centre for Volkswagen commercials and Isuzu Ute, while we kept the Subaru, Honda and Volkswagen passenger vehicles in Maitland.”

HMG then created a service centre for the commercial models in a 9500-square-metre facility in Rutherford and then added a parts warehouse and pre-delivery centre.

“That freed up Maitland for the retail of the cars,” he said.

“It has been great to see the business grow. I expect that will continue as the population and the brands are forecast to grow by a further 20 per cent within about seven years.”

Mr Dawes said 50 per cent of the sales were from repeat customers and from referrals. He said he believed the acquisition by AHG would “take the business to another level”.

Mr McConnell said he expected to drive revenue and cost synergies across HMG’s dealerships.

“It is a well-run business with a stable team and brands that can be rolled into an existing, well-performing AHG hub with a number of initiatives that we can put into place to further improve the operating result,” he said.

 

By Neil Dowling