Group 1 Automotive Inc. said Thursday that revenue and profit grew by double-digit percentages in the third quarter, boosted by surging per-vehicle profit margin, cost controls and improved service-lane business.
The solid performance came in spite of a 12 percent drop in companywide new-vehicle sales as Group 1's inventory dwindled because of the global microchip shortage. The retailer had an 11-day supply of new vehicles in the U.S. at the end of September, down from a 52-day supply a year earlier.
"We continue to sell most new vehicles almost immediately upon manufacturer delivery," Group 1 CEO Earl Hesterberg said in a release. "Assuming no material change in consumer demand, this dynamic should continue throughout the fourth quarter and into 2022."
Hesterberg said Group 1's agreement to buy 30 stores and three collision centers from Prime Automotive Group, announced in September, remains on track to close next month. Those 30 Prime dealerships generated $1.8 billion in annual revenue last year. Group 1 this month acquired two dealerships in Texas and one in California, adding an estimated $235 million in annualized revenue.
Upon closing, the Prime deal would bring Group 1's total acquired revenue in 2021 to $2.5 billion and its dealership count to 221, including 150 in the U.S.