Mainland Europe’s traditionally small dealer groups are growing bigger through acquisitions, but are still eclipsed by UK-based groups, which continue to expand despite Brexit concerns, research shows.
The UK dealer groups’ ability to post profits even in a period of weakness prompted in part by Brexit concerns has attracted outside investment, most recently from Swedish firm Anders Hedin Invest, which in January bought an 11.6 percent stake in Pendragon, the UK’s largest dealer group and Europe’s third largest, according to data from analyst firm ICDP.
Non-British companies are targeting UK dealer groups because of the sector’s longtime strength and because of the weakness of the pound, which has been depressed by the UK’s failure to agree with the European Union on the country’s exit from the bloc, ICDP Senior Researcher Peter Bailey said.
U.S. company Penske is now Europe’s second-largest dealer group largely because of its UK investment. In addition, South Africa’s Super Group increased its UK footprint last year after buying 18 dealer sites, which mainly sell Ford models.
The share of UK car sales captured by the country’s top 50 dealer groups rose to 42 percent last year from 27 percent in 2008, ICDP figures show. Between 2017 and 2018,196 dealers changed hands in the UK, it said.