The move was completed at around the same time as chief executive Trevor Finn bought Dixon Motors’ Honda outlets. Pendragon has now acquired 14 dealerships within the past month, adding more than £100m to turnover (£3.3bn) and taking the group to 276 sites.
The latest acquisition, for an undisclosed sum, comprises of Priory’s Bedford autopark, home to Honda, Nissan and Fiat dealerships, its Honda site in Cambridge plus its Fiat, Honda and former MG Rover businesses in Mansfield. All staff have been transferred as part of the deal.
AM revealed last issue that Pendragon had just bought its first Honda dealerships in Bradford, Doncaster, Harrogate, Horsforth and Leeds, previously operated by Dixon Motors. It also bought two of Dixon’s Fiat and Alfa Romeo dealerships in Leeds, and has taken on the Fiat and Alfa Romeo franchises for Leicester, recently dropped by Reg Vardy.
Pendragon now has eight Honda sites. “We’ve wanted to do something with Honda for a long time but were waiting for the right opportunity. We didn’t particularly want to pick up just one business at a time, so the Dixon sale was an attractive opportunity,” says Finn.
“Honda has always been a strong performing franchise, which to some extent has made it difficult to get into. From a brand point of view it has a great reputation and great products.”
Finn wouldn’t be drawn on what percentage of Honda UK’s sales he would like Pendragon to achieve, although his strategy is based around scale representation with chosen franchise partners. He will consider adding more dealerships “in the right circumstances”.
John Kennedy, head of network development at Honda UK, says the recruitment of Pendragon alongside its existing volume partners such as Arnold Clark and Lookers will help the carmaker in its quest for 10% annual growth in volumes.
Kennedy says it’s a case of “wait and see how it goes” whether Honda will want Pendragon to increase its representation going forward.
The partnership with Honda is the second major development for Pendragon this year. In July, it signed an agreement with Kia to open eight showrooms for the value brand.
AM reported in June that North Eastern Co-op, which owns Priory Motor Group, planned to withdraw from motor retailing. It had already started touting its 27 franchised sites to potential buyers.
Reg Vardy paid £15.5m for a BMW and Mini dealership in North Tyneside, Vauxhall outlets in Blaydon and Gateshead, and a dual franchised Kia and Chevrolet showroom in Gateshead. It also bought one of Priory’s four bodyshops.
Priory spokesman Steve Warren says the group expects to complete the disposal of all its remaining dealerships “in the first couple of months of 2006”.