As other publicly held dealership companies slow their growth, Group 1 Automotive Inc. continues to acquire dealerships.
CEO Ben Hollingsworth said the company has acquired two new 'platform' dealership groups and one 'tuck-in' dealership. Group 1 of Houston now holds 104 franchises in eight states.
A platform is a group of large, well-run multifranchise dealerships in a major metropolitan market. A tuck-in is a one-franchise dealership that becomes part of a platform group.
Group 1 closed on Bohn Auto Group in New Orleans in the fourth quarter of 1999 and completed the deal on Ira Automotive Group in Boston last month. Bohn Auto Group has Toyota, Buick, Ford, Pontiac and GMC franchises and annual revenues of $180 million. Ira Automotive Group sells Toyota, Lexus, Porsche, Audi, Subaru, Mazda, Isuzu, Buick and Pontiac and represents about $260 million in annual revenues. Group 1 acquired Victory Dodge in January, renamed it Ira Dodge and tucked it in with Ira Automotive Group.
Hollingsworth said Group 1's earnings per share for the first nine months of 1999 increased about 40 percent over the same period in 1998. Its revenues through September 1999 were $1.82 billion, topping its total 1998 revenues of $1.63 billion.
Group 1 will release its 1999 earnings report Feb. 17.
Hollingsworth said Group 1 is successful because it finds the best-run dealerships, retains the former dealer principal as platform president, and lets each platform president manage stores as local market conditions dictate.
'We don't radically change anything,' Hollingsworth said. 'We let the dealers run the car business, and we take care of the financial business.'
Group 1 spent $855 million to acquire 34 franchises in 1998, $922 million to acquire 35 franchises in 1999 and plans to spend about $800 million on acquisitions in 2000, Hollingsworth said.
Group 1's stock prices are being affected by problems plaguing other companies, Hollingsworth said. For instance, in December, AutoNation, the nation's largest public dealership chain, announced the closing of its 23 used-car superstores. AutoNation's per-share stock price started 1999 at $26 and ended the year at about $14. On Wednesday, Feb. 2, the stock price was $12.12.