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About Jay Leasing Inc

Group 1 Automotive is a new and used car retailer with more than 185 dealerships, some 240 franchises, and about 50 collision service centers. It operates in the US, UK, and Brazil. The US is the biggest market, and the company is present in 15 US states. Group 1's largest concentration of dealerships is in its home state of Texas. Of the some 30 car and light truck brands Group 1 offers, Toyota/Lexus vehicles are its biggest sellers, followed by BMW/MINI and Volkswagen/Audi/Porsche/SEAT/SKODA. The company also offers financing, provides maintenance and repair services, and sells replacement parts. It went public in 1997.

Operations

Group 1 Automotive's had three reportable segments: U.S. (more than 75%), U.K. (20%), and Brazil (about 5%).

The U.S. and Brazil segments are led by the President, U.S. and Brazilian Operations, and the U.K segment is led by a Managing Director, each reporting directly to the Company's Chief Executive Officer, who is the Chief Operating Decision Maker. Each of the segments is comprised of retail automotive franchises that sell new and used cars and light trucks; arrange related vehicle financing; sell service insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts. The vast majority of the Company's corporate activities are associated with the operations of the U.S. segment and therefore the corporate financial results are included within the U.S. segment.

The company's brand offerings include: Toyota, BMW, Porsche, SEAT, SKODA, Ford, Lincoln, Audi, Buick, Cadillac, Mercedes-Benz, Smart, Sprinter, Chrysler, Honda, Nissan, Lexus, Chevrolet, Volkswagen, Dodge, Jaguar, Land Rover, Mini, Jeep, Acura, GMC, RAM, Hyundai, Kia, Genesis and Other.

Geographic Reach

The company lease their corporate headquarters, located at Houston, Texas, as well as their regional headquarters in Brazil. They own their regional headquarters in the U.K. At fiscal year 2019, they had more than 185 dealerships, about 245 franchises, and nearly 50 collision centers in the United States, United Kingdom and Brazil.

The company operations are located in geographically diverse markets that extend domestically across 15 states aggregated into one U.S. region, and internationally in the U.K. and Brazil, representing their three reportable segments: U.S., U.K. and Brazil.

Sales and Marketing

The Company expenses the costs of advertising as incurred. Advertising expense is included in Selling, general and administrative expenses in the Consolidated Statements of Operations and totaled $75.2 million for both fiscal year 2019 and 2018. The Company receives advertising assistance from certain automobile manufacturers which the Company is required to spend on qualified advertising and which is subject to audit and chargeback by the manufacturer. The assistance is accounted for as a reduction to SG&A expenses as earned and amounted to $15.4 million in 2019, respectively.

Financial Performance

Group 1's revenue has steadily increased the past five years.

In 2019, revenue rose about to $12.0 billion compared to $11.6 billion in 2019, despite a drop in used vehicle wholesale sales in the US and the UK. The increase in U.S. same store revenue was driven by growth in all of our revenue streams with the exception of used vehicle wholesale sales.

The company's profit raised to $174.0 million in 2019 from $157.8 million in 2018.

Group 1 had $28.1 million in cash in 2019 compared to $18.7 million the year before. Operations produced $370.9 million in 2019, while investing activities used $291.6 million and financing activities used $67.0 million.

The company carries about $1.5 billion in debt, which could hamper its ability to raise new debt and limit its flexibility in responding to industry and economic changes.

Strategy

The company's business strategy primarily focuses on the performance of their existing dealerships to achieve growth, capture market share, and maximize the investment return to their stockholders and also focuses on enhancing their dealership portfolio through strategic acquisitions and dispositions. They constantly evaluate opportunities to improve the overall profitability of their dealerships. For 2020, their priorities are: Used Vehicle Retail Growth; Parts and Service Growth; Digital Initiatives to Enhance the Customer Experience; and Cost Management as They Continue to Grow Gross Profit.

Group 1 acquisition strategy, they seek to acquire large, profitable, well-established dealerships and franchises that are leaders in their markets to: enhance brand and geographic diversity with a primary focus on import and luxury brands; expand their brand, product, and service offerings in their existing markets; expand into geographic areas they currently do not serve; and/or capitalize on economies of scale and cost savings opportunities in their existing markets in areas such as used vehicle sourcing, advertising, purchasing, data processing, personnel utilization, and the cost of floorplan financing, thereby, increasing operating efficiency.

Their divestiture strategy is they continually review the investments in their dealership portfolio for disposition opportunities based upon a number of criteria including: the rate of return on their capital investment over a period of time; location of the dealership in relation to existing markets and their ability to leverage our cost structure; potential future capital investment requirements; the brand; and existing real estate obligations, coupled with their ability to exit those obligations or identify an alternate use for real estate.

Mergers and Acquisitions

In 2019, the Company acquired four dealerships representing six franchises in the U.S. and four dealerships representing five franchises in the U.K. Aggregate consideration paid for these dealerships, which were accounted for as business combinations, totaled $143.2 million. They also opened one dealership representing one franchise in the U.S. and two dealerships representing three franchises in the U.K.

In mid-2019, Group 1 expanded its presence in the New Mexico market with the acquisition of two BMW/MINI dealerships in Albuquerque and Santa Fe. The deal also includes BMW Motorrad franchises in Albuquerque and Santa Fe, making Group 1 the exclusive seller of BMW Motorcycles in New Mexico.

In late-2019, the Company acquires two Lexus Dealerships in New Mexico. The dealerships are located in Albuquerque and Santa Fe. These stores are the only Lexus franchises in the state of New Mexico and are expected to generate approximately $90 million in annualized revenues.

Jay Leasing Inc

1661 Whittlesey Rd
Columbus, GA 31904-3645
Phone: 1 (706) 324-1234

Firm Stats

Employer Type: Privately Owned
Employees (This Location): 2
Employees (All Locations): 5

Major Office Locations

Columbus, GA