Europe's biggest dealer groups strengthened their hold on the new car market by boosting both share and revenue in 2021.
The region's top 50 car retailers, led by Switzerland's Emil Frey, increased their market share to 14 percent of all new cars sold last year, up two percentage points from 2019, rankings published by automotive retail analyst ICDP show.
If the trend continues, Europe's largest dealer groups are poised to beat ICDP's long-standing prediction that they will have a 15 percent share by 2025.
By 2030, the top 50 biggest will account for 20 percent of all sales, ICDP predicts, as the biggest companies swallow smaller players and automakers prioritize relationships with larger groups.
"The balance of power titling toward them," ICDP Managing Director Steve Young told Automotive News Europe.
The top 50 groups boosted revenue by 17 percent in 2021, according to ICDP, which tracks posted revenue numbers by the groups to create the ranking. The growth came from reductions in new-car discounts stemming from shortages and the related boom in used-car values.
"It was difficult not to make money last year," Young said.
Winners included the UK's Vertu group, which rose to sixth to from 11th after revenue increased 46 percent to 4.2 billion pounds ($5 billion) last year.
The financial bonus from the car production shortage has carried over into 2022. For example, No. 7 Pendragon, also based in the UK, reported a 60 percent increase of gross profit margin on new cars rose to 2,576 pounds per car with an average selling price of 29,036 pounds.
Pendragon sold 52,782 new cars last year, according to ICDP data, compared to an estimated 250,000 for leader Emil Frey (not all companies publish financial data).
The dealer bonus generated by the shortage of new cars is likely to end when supply begins to return in 2023 as manufacturers start pushing more volume to reclaim share lost to those that were able to produce more cars.
"In the case of returning supply in a time of declining demand, my fear is that all lessons learned during the last two and half years will be thrown out," Young said.
The big dealer groups have grown by buying smaller rivals as they position themselves to better face looming challenges, including the move by automaker to turn dealers into sales agents in return for a fixed fee.
"Larger players will be more willing and able to adapt than smaller investors who may find the financial risk and change of role to be unacceptable," Young said.
Big movements in dealer ownership include the May 2022 buyout of No. 10-placed UK company Marshall Motor Group by Constellation, the owner of the BCA car auction brand.
Through September of this year, ICDP tracked 495 sales outlet acquisitions, with 123 coming from dealer groups based outside the country where the purchase took place. The companies making those deals include Emil Frey, Sweden's Hedin and the Dutch group Van Mossel.
Last year's big cross-border purchases included Hedin's acquisition of the 74 outlets from Stern Groep of the Netherlands. Hedin is also bidding to take over the public-listed Pendragon group in the UK.