JAPANESE retailer IDOM Inc, through its Australian subsidiary, has followed up its acquisition of DVG in Perth, and made good on its promise to expand beyond Western Australia, with the purchase this week of Melbourne-based Andrews & Wallis Motor Group.
IDOM is believed to have paid close to $70 million for Andrew & Wallis, based in Essendon Fields in Melbourne’s north, which has seven franchises – Honda, Mazda, Toyota, Chrysler and Jeep, Alfa Romeo, Fiat and Isuzu Ute.
The franchises are on four sites in Wirraway Road, Essendon Fields: Essendon Honda, Essendon Mazda and Airport Toyota, while Essendon Chrysler and Jeep and Essendon Isuzu Ute are on the same site.
The purchase comes three years after IDOM paid about $121 million for 67 per cent of WA-based DVG Automotive Group, the second biggest retail operation in the state after Automotive Holdings Group Ltd.
The CEO of IDOM Inc’s Australian subsidiary, IDOM Automotive Group, Takayoshi Udagawa, said IDOM’s plan was to broaden its new car dealership network and it was now executing its national growth strategy.
“We have stabilised the DVG business in WA, and thanks to our dedicated and committed employees, we are now delivering improved results in what is still challenging market conditions,” he said.
“Now is the right time for IDOM to start executing its expansion strategy into the east-coast automotive market, and Andrews & Wallis is an amazing business for IDOM to grow into.
“We believe in the group, we believe in their culture, we believe in their people, and we are excited by their 100 per cent commitment to a ‘customer-first’ philosophy.
“For IDOM, our primary objective is to become the partner of choice to our franchise partners through our commitment to customer and employee satisfaction and shareholder returns.
“We look forward to working with every member of the Andrews & Wallis Motor Group team, with a view to soon being Australia’s ‘automotive solutions provider of choice’.”
Mr Udagawa said the acquisition combined the attributes of great brands, great people and a location within a strategic commercial hub that has excellent growth potential.
“It has strong annual sales revenue, with strong internal processes and a committed focus on customer service, which closely aligns with IDOM’s objective of being the number one, customer-focused automotive solutions provider,” he said.
Andrews & Wallis was started in 1991 by John Andrews and former Western Bulldogs captain Steve Wallis, and is currently owned by Mr Andrews, Mr Wallis and four other partners, Jonathan Andrews, Joe Cucuzza, Greg Macpherson and Pasquale Scaturchio.
In the 2017/18 financial year, the group had a turnover of $261 million and normalised net earnings before tax of $12 million.
This compares with the DVG turnover in the last financial year of about $500 million.
Mr Wallis said his group “was excited to be a part of the IDOM Automotive Group who have such a closely aligned ‘customer-first’ philosophy to that of ours”.
“IDOM has a supportive culture. They are happy for us to continue implementing our growth strategy for the AWMG business, while offering us all of their knowledge and innovation that comes from being a global automotive leader,” he said.
The Andrews & Wallis Motor Group deal has settled all customary conditions, including manufacturer approvals. IDOM bought 100 per cent of the group, though said there were some “industry standard dealer principal equity arrangements”.
“All management and key staff retain their positions and the current dealer principal status remains as is,” it said in a briefing to GoAutoNews Premium.
IDOM has a network of more than 550 used-vehicle stores in Japan and also operates new car dealerships and overseas businesses.
It was founded in 1994 and expanded its business by operating used car stores nationwide under the Gulliver brand. It became a publicly traded company on the Tokyo Stock Exchange in 1998.
By Neil Dowling