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Group 1 enters the UK market

A second US-based dealer group has begun building a business in the UK.

Group 1 Automotive, whose head office is in Houston, Texas, has bought £91.5m turnover Chandlers Garage in south-east England. Chandlers has BMW/Mini dealerships in Brighton, Worthing and Hailsham.

The first US-based group to invest in a UK motor retail operation was United Auto Group, run by Roger Penske. It bought the top 10 AM100 group Sytner in 2002, and has 10 UK BMW outlets.

Jim O’Donnell, BMW UK managing director, put Group 1 in touch with Chandlers. He says: “This means there’s another big, powerful group representing BMW that knows how to grow volume.”

“The UK has been a closed door operation, that’s to say that within its curtain we’d like you to expand but if you’re outside the curtain we won’t let you in. Block exemption was playing to the demands of Sytner, Pendragon and Inchcape, and the industry needed another big player to increase the competition.”

Earl Hesterberg, Group 1 president and chief executive, says Group 1 will retain the Chandlers trading name. He has been eyeing the UK’s market for a while, and has been in talks with a number of carmakers.

“For a US company looking to expand, the UK represents the least riskiest market outside the US,” says Hesterberg, who has headed Group 1 since 2005.

Overseeing the UK operation will be Hesterberg’s former Ford of Europe colleague Ian Twinley, chairman of John Grose group. Hesterberg hopes to share ideas and best practices with Twinley, which will benefit Group 1 and John Grose.

He adds: “We’re planning to grow our presence in the UK. We’ve nothing in mind at the moment; we have to digest this first.”

Group 1 and Earl Hesterberg

Since flotation in 1997, Group 1 Automotive has established a network of 104 dealerships with 143 franchises and 28 bodyshops for 33 carmakers in the USA. These operate under more than 20 dealer brands.

Hesterberg joined as CEO in April 2005. Prior to that he was group vice president for marketing, sales and service at Ford Motor Company North America, a post he gained after five years in the same role at Ford of Europe, during which he established Ford Retail.

Earlier in his career he held senior positions with Nissan and Infiniti in the USA, Nissan Europe and Gulf States Toyota.

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