Honda UK has bought the freehold of three of its dealerships in the East Midlands and Lookers will run the retail operation which has a £22m annual turnover.
The group has taken over the privately-owned Chatsworth Honda territory for an undisclosed sum. Three Honda dealerships – in Derby, Nottingham and Mapperley, north Nottingham – will now trade under the Lookers brand.
Honda's move is in line with an expected strategy among carmakers. Owning freeholds gives them a measure of control in retailing while leaving the operation to dealer groups.
A number of leading dealer bosses believe this would be a sensible strategy to relieve retailers of financial burdens. The policy combines the financial clout of multi-national manufacturers with the entrepreneurial flair of successful dealers.
Fred Maguire, Lookers executive chairman, said: “We are delighted to take over this large and important territory which will greatly increase our representation of Honda and take us into a new region of England.
“Chatsworth Honda was an excellent family business with a good management structure and a strong focus on customer care. It is a perfect fit for Lookers and our 'customers for life' philosophy.”
The business will be run by Brian Schumacker, Lookers operations director with responsibility for Honda. Lookers acquired its first Honda outlet (in Liverpool) in May last year and it will add a fifth (on Merseyside) later this year.
Chatsworth Honda sold around 2,000 new and used cars a year and Lookers intends to grow the business. The acquisition takes Lookers' annual turnover above £700m.
In its last financial year, Lookers' turnover was £582.5m with pre-tax profits of £6.51m. With the acquisition of Chatsworth Honda's territory, the company has 80 motor retail outlets across northern England, the north Midlands, south-east England and Northern Ireland.
Announcing the results, Mr Maguire said Lookers paid almost £13m for 18 dealerships in 2000. Net assets totalled £70.3m.