Group 1 Automotive Acquires Modern Classic Motors in Hilton Head, South Carolina

Rhea-AI Summary

Group 1 Automotive, Inc. (NYSE: GPI) acquires Modern Classic Motors in Hilton Head, South Carolina, expanding its relationship with Mercedes-Benz and Honda. The acquisition is expected to generate $140 million in annual revenues, adding to the company's acquired revenues of $1.0 billion in 2024.

Insights

Market Research Analyst

The acquisition by Group 1 Automotive of Modern Classic Motors is a strategic expansion that is poised to bolster the company's revenue and market presence. From a market research perspective, the key takeaway is the growth potential in Beaufort County, which is identified as one of the fastest-growing regions. This suggests a calculated move by Group 1 to tap into a burgeoning market with an increasing demand for automotive sales and services.

Moreover, the addition of franchises such as Mercedes-Benz and Honda enhances the company's brand diversity and appeal to a broader customer base. The expected $140 million in annual revenues from this acquisition indicates a significant increment in Group 1's financial performance. This figure also contributes to the impressive cumulative acquired annual revenues of $1.0 billion in 2024, following a strong previous year's performance of $1.1 billion in acquisitions.

It's important to note that the automotive retail industry is highly competitive and strategic acquisitions like this can provide Group 1 with a competitive edge in terms of market share and customer loyalty. The impact on the stock market could be positive if investors perceive this expansion as an indicator of robust growth and effective management strategy.

Financial Analyst

From a financial standpoint, Group 1 Automotive's acquisition is a substantial investment that has the potential to enhance shareholder value. The acquisition's contribution of $140 million to the annual revenue stream is a significant figure, representing a strategic addition to Group 1's portfolio. This move is indicative of the company's aggressive growth strategy, as evidenced by the $1.0 billion in annual revenues acquired year-to-date in 2024.

Investors will likely scrutinize the acquisition's impact on Group 1's overall financial health, including profitability margins, earnings per share and return on investment. The fact that Group 1 is continuing to expand its relationship with reputable brands like Mercedes-Benz and Honda suggests confidence in the profitability of these franchises.

Long-term, the acquisition could lead to economies of scale, improved bargaining power with manufacturers and a stronger position in the automotive retail market. However, the initial capital outlay and integration costs will be key factors in determining the short-term financial impact. It will be crucial to monitor how effectively Group 1 integrates these new dealerships into its existing operations to realize the projected revenues.

Automotive Industry Expert

The acquisition of Modern Classic Motors by Group 1 Automotive has significant implications for the automotive retail industry. Group 1's expansion of its dealership network with premium brands like Mercedes-Benz and Honda aligns with industry trends of consolidating high-value brands to attract affluent customers, particularly in growing markets such as Beaufort County.

The automotive industry is witnessing a shift in consumer preferences, with a growing appetite for luxury and reliable vehicles. Group 1's strategic positioning with 17 Mercedes-Benz and 13 Honda franchises across the U.S. and U.K. could capitalize on these trends. The company's increased footprint in these segments could lead to enhanced customer service capabilities and a more robust inventory offering, which are critical factors in driving sales and customer retention.

The long-term success of this acquisition will depend on Group 1's ability to integrate the new dealerships effectively, maintain operational efficiency and navigate the challenges of the automotive industry, such as supply chain disruptions and shifts towards electric vehicles.

• Expected to Generate $140 Million in Annual Revenues
• 2024 Year-To-Date Acquired Annual Revenues of $1.0 Billion

HOUSTON, March 11, 2024 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), a Fortune 300 automotive retailer with 202 dealerships located in the U.S. and U.K., today announced the acquisition of Modern Classic Motors in Hilton Head, South Carolina.  The acquisition includes three franchises: Mercedes-Benz, Sprinter and Honda in Beaufort County, one of the fastest-growing counties in South Carolina.  The acquisition expands Group 1's relationship with Mercedes-Benz to 17 franchises in the U.S. and U.K. and with Honda to 13 franchises in the U.S.  The dealerships are expected to generate $140 million in annual revenues.  

Group 1's President and CEO Daryl Kenningham stated, "We are delighted to grow our relationship with Mercedes-Benz and Honda while adding scale to our successful Hilton Head operations with these highly desirable brands."  

Group 1 has now acquired an estimated $1.0 billion of annual revenues in 2024, which follows $1.1 billion of acquired revenues in 2023.

ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 202 automotive dealerships, 265 franchises, and 43 collision centers in the United States and the United Kingdom that offer 35 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Group 1 discloses additional information about the Company, its business, and its results of operations at www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, www.facebook.com/group1auto, and www.twitter.com/group1auto.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our strategic investments, goals, plans, projections and guidance regarding our financial position, results of operations and business strategy, including the annualized revenues of recently completed acquisitions or dispositions and other benefits of such currently anticipated or recently completed acquisitions or dispositions. These forward-looking statements often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions, on a timely basis, if at all and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, (i) the armed conflicts in Ukraine and the Middle East, (j) the impacts of any potential global recession, (k) our ability to maintain sufficient liquidity to operate, and (l) our ability to successfully integrate recent and future acquisitions. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Investor contacts:
Terry Bratton
Manager, Investor Relations
Group 1 Automotive, Inc.
ir@group1auto.com 
Media contacts:
Pete DeLongchamps
Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
pdelongchamps@group1auto.com 
or
Clint Woods
Pierpont Communications, Inc.
713-627-2223
cwoods@piercom.com 

View original content:https://www.prnewswire.com/news-releases/group-1-automotive-acquires-modern-classic-motors-in-hilton-head-south-carolina-302085811.html

SOURCE Group 1 Automotive, Inc.

FAQ

How many dealerships does Group 1 Automotive, Inc. have in the U.S. and U.K.?

Group 1 Automotive, Inc. has 202 dealerships located in the U.S. and U.K.

Which brands are included in the acquisition of Modern Classic Motors by Group 1 Automotive, Inc.?

The acquisition includes Mercedes-Benz, Sprinter, and Honda franchises in Beaufort County, South Carolina.

What is the expected annual revenue from the acquired dealerships?

The acquired dealerships are expected to generate $140 million in annual revenues.

How much annual revenues has Group 1 Automotive, Inc. acquired in 2024?

Group 1 Automotive, Inc. has acquired an estimated $1.0 billion of annual revenues in 2024.

How many Mercedes-Benz franchises does Group 1 Automotive, Inc. have in the U.S. and U.K.?

Group 1 Automotive, Inc. has 17 Mercedes-Benz franchises in the U.S. and U.K.

How many Honda franchises does Group 1 Automotive, Inc. have in the U.S.?

Group 1 Automotive, Inc. has 13 Honda franchises in the U.S.