AM Online

Fewer groups exert greater control

The number of retail groups operating in the UK has fallen year-on-year, but their influence over the automotive industry is growing, according to the latest Sewells Franchise Networks report.

While there are 25 fewer groups, 555 compared to 580 in 2002, they own more sites – 3,365, up by 49 – suggesting significant acquisition activity by the larger groups. On average each dealer group operates six sites (up from 5.7), and the emphasis is firmly at the top end of the AM100. Just 20 groups have more than 25 sites, while 213 (41%) operate two sites and 196 (33%) three to five sites. The AM100 top 20 accounts for 20% of all retail sites.

What this shows is that the revisions made to block exemption, which took effect in October 2003, are not the driving force behind consolidation – much of the growth occurred before this date. The figures do not include Pendragon's acquisition of CD Bramall, which was prompted by Tony Bramall's wish to retire rather than block exemption, and it's clear that further consolidation is likely this year. Major groups like Reg Vardy, Inchcape, Lookers and Arnold Clark have outlined plans to expand, either by piecemeal purchases or large scale acquisitions.

According to the Sewells report there are opportunities for all retailers, with 20 carmakers looking to expand their networks. Heading the list is MG Rover, which is looking for 30 dealers.

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