Manchester-based RRG Group, one of the UK's largest privately-owned motor retail groups, was this week sold to a Japanese trading company. The purchase price was thought to be in the region of £15m.
Michael Smyth, who founded the company 33 years ago as Radcliffe Road Garage Company, increased his personal fortune when the deal was completed. Mr Smyth sold RRG's Elton Vehicle Contracts to First National Motor Finance which formed its Emac warranty division.
In the revised AM100 published in this issue, RRG is at No41 with a turnover of £160m. Mr Smyth's company also appears in a new listing of the 20 groups which performed best with shareholders' funds.
The purchaser was Marubeni Corporation, a Japanese trading house with global interests. Its subsidiaries include the Toyota distributor in Ghana and it distributes Nissans in several countries including Norway and Belgium.
RRG has strong connections with Toyota Motor Group, opening dealerships for its Lexus brand in Manchester and Bolton this year. The group sold 3,500 new Toyota and 600 Lexus cars last year, more than any other group representing the twinned marques.
Last year RRG, which also has strong interests in Peugeot, returned a pre-tax profit of £2.1m.
Piers Trenear-Thomas, of RSM Robson Rhodes, said: “Marubeni would have been attracted to RRG because it is a specialist dealer group with good, purpose-built premises in a metropolitan area.
“Michael Smyth has always delivered good returns, making RRG the sort of business worth investing in – and one of the few in UK motor retailing.”
In an interview with Automotive Management (March 3) Mr Smythe made a strong case for traditional motor retailers. He said he was ready to compete against dotcom specialists. Describing himself as “a follower” of Sir Richard Branson, Mr Smyth said he expected Virgin Cars to fail. “Branson's ideas about selling cars make wonderful reading in the press but I wonder whether Virgin has thought through customers' needs.”
Explaining his decision to concentrate on two manufacturing groups, he said: “Toyota/Lexus and Peugeot understand the need to look after their dealers.”
RRG gained the Toyota franchise in 1971 and Radcliffe Road became a limited company, employing 15 people. It now has more than 400 employees.