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MORE US automotive groups are buying offshore assets, including Penske’s recent foray into Australian Porsche dealerships, with the latest being Houston-based Group 1 Automotive that now has more than 20 Mercedes-Benz dealerships in the UK following the purchase of four Mercedes businesses in England.

Group 1 Automotive has bought L&L Automotive’s four Mercedes businesses located north of London at Stevenage, Hertford, Hemel Hempstead and Bishop’s Stortford.

The four Mercedes-Benz stores will bring Group 1’s year-to-date completed acquired revenue to $US1.1 billion ($A1.65b), the dealership group said.  The sales are the first in the UK since Mercedes-Benz went to the agency model.

It comes 10 weeks after Group 1 announced it was paying £346 million ($A658m) for Inchcape’s entire dealer group of 54 outlets operating in the UK – a deal expected to complete by the autumn. This includes 12 Mercedes dealerships.

Group 1 expects that deal to close in the third quarter. It will bring Group 1’s year-to-date acquired annual revenue to $US3.8 billion ($A5.7b).

Group 1 chief executive Daryl Kenningham said in a statement: “We are delighted to expand our relationship with Mercedes-Benz while growing our operations in the UK.”

Daryl Kenningham

“This brand is outstanding and our ability to add these dealerships to our portfolio is a very positive growth action and presents an opportunity to further drive profitable growth for our shareholders.”

Group 1 Automotive bought its first UK Mercedes dealerships in 2018 from Robinsons in East Anglia and bought the rest of Robinsons three years later. Its existing Mercedes-Benz of Cambridge site is less than an hour from the L&L businesses at Stevenage and Bishop’s Stortford.

Automotive Management is reporting that AM100 dealer groups often looked for synergies and management savings from adding dealerships within proximity of current operations.

Group 1 has said that its additions “are contiguous with several other dealerships currently owned and operated by Group 1 in the UK.”

The four extra dealerships are expected to sell more than 2800 new and used vehicle units annually.

It said this acquisition is expected to generate $US105 million $A157.5m) in annual revenues, with new cars sales recorded as net revenue under Mercedes’ agency model.

As part of its takeover of Inchcape’s dealerships, Group 1 is also gaining 12 Mercedes dealerships in the East Midlands and North West of England. 

David Kendrick, chief executive of UHY Hacker Young (Manchester) which represented L&L Automotive’s owners in the sale, told AM: “It is unique for a Mercedes market area to come available and the first time one has transacted since the agency retail model was introduced in 2023.“The group that will be a great addition for Group 1 who are on a serious expansion journey in the UK now with the Inchcape deal likely to complete imminently also.”

So far in 2024, Group 1 has nearly surpassed the almost $US1.1 billion ($A1.65b) in total annualised acquired revenue that it acquired in all of 2023. This does not include the Inchcape deal.

In its US market, the group in February bought RRR Automotive Group, an acquisition expected to add more than $US500 million ($A750m) in annual revenue. 

Also that month, Group 1 acquired two of Wilson Automotive’s Southern California Lexus dealerships, which are expected to generate $US350 million ($A525m) in annual revenue.

And in early March, Group 1 bought the two-store Modern Classic Motors in Hilton Head, South Carolina, which is expected to generate $US140 million ($A210m) in annual revenue.

In Australia, Penske Automotive recently bought car dealerships owned by PM Group. The two Porsche dealerships in Melbourne are the first passenger-car dealerships bought by Penske, which also has truck dealerships in Australia. Penske also recently withdrew from a motorcycle dealership in Melbourne.

By Neil Dowling

AdTorque Edge