Group 1 Automotive is only one in a group of firms (AutoNation and Penske Automotive Group are the largest) striving to consolidate US auto sales. The company owns and operates more than 145 franchises at about 115 dealerships, as well as about 28 collision service centers in about 15 US states. More than half of Group 1's dealerships are located in Texas, Oklahoma, and California. Group 1 Automotive also has 25 franchises at about 20 dealerships and several collision centers in the UK and 20 franchises at dealerships and five collision centers in Brazil. The company's dealerships offer new (more than 55% of sales) and used cars and light trucks under some 30 different brands. It also offers financing, provides maintenance and repair services, and sells replacement parts.
Group 1 Automotive's operations include five core business segments: New Vehicles (58% of sales), Used Vehicles (23%), Parts & Service (11%), Used Vehicles wholesale (4%), and Finance & Insurance. In the UK the auto dealer operates through its subsidiary Group 1 Automotive UK Ltd.
The auto dealer rings up about 80% of its sales in the US; the remainder comes from the UK and Brazil. In Britain it has locations in Brighton, Chelmsford, Chingford, Farnborough, Hailsham, Harold Wood, Hindhead, Southend, Stansted, and Worthington.
Sales and Marketing
About 70% of Group 1’s 2014 new vehicle sales came from Toyota, Honda, Ford, BMW, and Nissan. Sales of new vehicles bearing Toyota/Scion/Lexus nameplates accounted for more than a quarter of new vehicle unit sales in 2014.
Group 1 spent $73.8 million, $59.0 million, and $54.1 million in 2014, 2013, and 2012, respectively.
Group 1 has reported consistently rising revenue since 2010 and in 2014 it grew another 11% compared to the previous year. Increased sales of all vehicle groups, particularly luxury models, lead to the improvement. Net income has also been on the rise but dipped 20% in 2014 due to increased sales commission costs as the company sold more cars.
2013 sales jumped 19% versus 2012 to $8.9 billion (a company high), while net income climbed 14% over the same period to almost $114 million. Driving its strong financial performance were double-digit gains on new and used vehicle retail sales, and in its used vehicle wholesale business. Stronger consumer confidence and more dealerships contributed to the increases. Finance and insurance sales jumped about 14%, while parts and service sales climbed 7%. Cash flow from operations rose to $52 million in 2013 on higher net income, gain on dispositions, and a favorable change in working capital.
Like its rival AutoNation, Group 1 Automotive is focusing on acquiring import and luxury brand dealerships. The Houston-based auto dealer is also expanding internationally, both in the UK (where it already has an established presence) and in Brazil, a relatively new market for the company. Those countries accounted for 18% of sales in 2014. The company's strategy also includes growing its higher margin parts and services business, growing its share of the new and used vehicle market, taking advantage of its size to boost efficiency, and continuing to make strategic acquisitions. In recent years Group 1 has seen import and luxury brands account for an increased share of its business.
Mergers and Acquisitions
In 2015 Group 1 continued to add to its dealership roster, though not at the pace it did in 2014. It added Audi and Mercedes-Benz dealerships in Texas as well as one of the nation's top Audi dealerships, Prestige Audi of North Miami Beach.
The company in 2014 acquired the Alex Rodriguez Mercedes-Benz dealership in the Houston suburb of League City. Also in the Houston area, the company expanded its Hyundai operations, opening a new South Loop Hyundai dealership. In Southern California, Group 1 bought Heller Ford and Heller Hyundai. Group 1 scooped up the Munday Chevrolet and Mazda operations in Houston, Texas. Up the road, the company bought South Point Kia in Austin, where it owns Maxwell Ford, Town North Nissan, and Round Rock Nissan.
Overseas, the company acquired three Elms BMW/MINI dealerships in the UK. The dealership are in Bedford, Cambridge, and Stansted.