Dealership Groups Are Going International

Auto retailing increasingly is becoming a global industry, with some U.S. publicly owned dealership groups seeing profit opportunities overseas, says Paul Melville, a partner with Grant Thornton, an automotive consulting firm.

For instance, he says, Bloomfield Hills, MI-based United Auto Group owns dealerships in the U.K. and Germany, has formed global partnerships with Toyota and BMW “and is going into France.”

Another publicly owned U.S. dealership chain, Group 1, based in Houston, TX, has acquired six dealerships in the U.K.

Group 1 acquired Chandlers Garage Holdings Ltd., comprised of three BMW/Mini dealerships in the southeastern U.K. The franchises are expected to generate approximately $180 million in annual revenues.

“This acquisition gives us the opportunity to expand our holdings into a strong demographic area of a proven market, with a powerful global automotive luxury brand,” says Earl J. Hesterberg, Group 1's president and chief executive officer.

Group 1 has shown significant growth in recent years with a focus on import and luxury dealerships, Melville says.

Meanwhile, Pendragon, a publicly owned U.K. company that runs about 7% of the dealerships there as the No.1 player has expanded into the U.S. and Germany.

Meanwhile, several Japanese firms, such as Marubeni and Inchcape, own dealerships in the U.K., France and Germany.