One of the nation’s largest auto retailers, Houston’s Group 1 Automotive, is scooping up two North Texas dealerships in a deal expected to boost its yearly revenue by around $150 million.
Classic Chrysler Dodge Jeep Ram of Denton and Classic Mazda of Denton will join Group 1′s 10 other dealerships in Dallas-Fort Worth and will bring the company’s total U.S. dealership count to 119. It bills itself as the third-largest automotive group in the nation.
Group 1 also owns and operates dealerships in the United Kingdom and Brazil.
The publicly traded Fortune 500 company declined to share financial terms of the deals.
Group 1′s decision to expand in North Texas was solidified by the company’s history in the area, said Pete DeLongchamps, Group 1 senior vice president for manufacturer relations, financial services and public affairs.
“Any time you can add scale in a market you’re already in makes sense,” DeLongchamps said. “And, let’s be honest, doing business in Texas is great.”
Group 1′s 74 franchises in Texas accounted for 37.8% of its new vehicle sales last year, according to a regulatory filing. Its brands span the automotive industry — from Toyota and Lexus to Ford and GM to Audi and BMW.
Less than a month ago, Group 1 announced the acquisition of Massachusetts-based Prime Automotive Group, whose 30 dealerships generated $1.8 billion in annual revenue in 2020. Following the Prime Automotive deal’s anticipated close in November, Group 1′s total acquired revenues are expected to be $2.4 billion.
Group 1′s continued expansion comes on the heels of the COVID-19 pandemic-induced slowdown in driving in 2020, which had detrimental effects on the automotive industry. The company saw a nearly 10% drop in its 2020 revenue of about $10.9 billion compared to its 2019 revenue of more than $12 billion.
Supply chain woes, including a global chip shortage, continue to impact auto manufacturers and dealers, although the industry is steadily returning to normal. Globally, consumer intent to purchase cars is nearing pre-pandemic levels, according to an August study by McKinsey & Co.
Following its most recent acquisition, Group 1 is already looking ahead in its growth plan.
“We’re open to growing markets with good brands,” DeLongchamps said. “[The North Texas dealerships], for example, are very, very high-performing, well-managed businesses, which is always a bonus.”
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