Inchcape agrees £346m sale to US-based dealer group

Car dealer group Inchcape will sell its UK retail operations to US-based Group 1 Automotive in a deal worth £346 million.

Inchcape, which operates more than 120 dealerships in the UK, said the sale allows it to become more distribution-focused. This will provide higher margins in the 40 countries in which it operates. 

According to Car Dealer Magazine, 99% of Inchcape’s global revenue and operating profits will come from its distribution activities. 

The sale to Group 1, which already operates in the UK, with 79 franchises and 3300 staff, is the latest from a North American buyer as a weak pound is making UK dealer groups irresistible targets. 

At the end of last year, Pendragon was sold for £280m to Lithia Motors, a firm that also bought Jardine Motors Group earlier in the year. Lookers was another, bought by Canada’s Alpha Auto Group. 

Inchcape boss Duncan Tait said the company’s board decided it was the correct time for new owners to take control of the business, as “the strategic importance of the UK retail operations has become limited”. 

"As we continue to deliver on our strategic ambition of becoming the leading global distribution partner to our OEM partners worldwide, this transaction represents a significant step along that journey,” said Tait. 

“Our UK retail business is a high-quality business, with an experienced and high-performing management team, and has been an important part of the group's growth. With our active international expansion into higher-value distribution activities, the strategic importance of the UK retail operations has become limited."

Tait added that the move would simplify the business and allow longer-term growth. 

"In Group 1, our UK retail operations will have a new owner with a strong track record of industry growth, existing presence and retail experience in the UK market and a strong balance sheet,” he said. 

“I'm grateful to our UK colleagues for building such a high-quality automotive retail network and I'm confident that the business will continue to excel under Group 1's ownership."

The dealer network operates in more than 30 countries across Europe, Africa, the Americas and Asia. In the UK, it works with Audi, BMW, Jaguar and Volkswagen.

In 2023, Inchcape posted a turnover of £2.07 billion, with an operating profit of £49m. It employs 3600 people in the UK and 19,000 people globally.