Group1Auto.com Fortune 500 automotive retailer
Group 1 Automotive has emerged as one of the top five auto dealership groups in the United States over a period of 12 years. It has also been listed in the Fortune 500 companies. At present, it owns and operates about 140 franchises at 105 dealerships and also owns 30 collision centers in 12 states of the United States. It also expanded its international operations in March, 2007 by acquiring Chandlers Garage Holdings Ltd. of the United Kingdom. Chandlers Garage Holdings Ltd had strong brand image in the local market and was dealer of BMW.
Product and Services
The company is known to market and sell about 34 brands of the automobiles. It sells new and used motor vehicles and also provides financing. Some of the other services provided include vehicle maintenance and repair services, replacement of the parts and warranty, insurance and extended service contracts.
New vehicles:
Group 1 Automotive sells about 34 brands of vehicles through its network of 105 dealerships. It also provides lease financing to its customers by making arrangements with third party lenders.
Used vehicles:
Used vehicles are sold by the company in each of its dealerships. It purchases used vehicles at the auctions by manufactures and wholesalers. Also, company’s operation of selling of new vehicles provides it with used vehicles through trade-ins and off-lease vehicles.
Parts and Services:
Replacement parts, repair and maintenance services are provided in all the dealerships, especially for the brands sold at that particular franchised dealership. This department also provides conditioning services for used vehicles and helps new vehicle department in preparing services of vehicle to proceed for the sale.
Finance and Insurance Services
Company provides third-party financing, maintenance services and insurance contract for the retail purchase of new and used vehicles to its customers. Group 1 Automotive provides third –party purchase and lease-financing and in lieu of which it receives fees from third party financing company. The third party finance companies include manufacturers’ captive finance companies, some commercial banks, credit unions and regional auto finance companies. It also provides vehicle warranty and extended protection products like extended warranties, maintenance or vehicle services, products and programs, guaranteed asset protection (GAP) insurance, credit life and accident and disability insurance, and lease wear and tear insurance.
Growth
Group 1 Automotive, incorporated in December, 1995, started its dealership operations in November 1997 and has become one of the leading operators in retail automotive industry worth $1 trillion. Many of the dealerships are more profitable than the industry average. It sold more than 197,000 retail vehicles in 2006 with the market cap of $1 billion as on April, 2006.
Some of the key strengths of the company are:
- Management’s experience in consolidating highly fragmented industries
- Utilizing equity to attract and retain highly talented personnel
- Maintaining brand and geographic diversity
- Cost-cutting by centralizing financing and some of the administrative functions of the dealerships
Some of the external factors that created ample opportunity for the company to carry out its consolidation program are:-
- Highly fragmented industry
- High cost of operation of automotive dealerships
- Absence of feasible exit strategy
- Capital shortage for expanding business faced by the dealers
Group 1 Automotive started its growth by acquiring large and profit making dealerships. It even began its operations in international market by acquiring Chandlers Garage Holdings Ltd., in March, 2007, which mainly comprised of BMW/Mini dealerships. It gained from the strategic location of Chandlers Garage Holdings Ltd in southeastern England, strong brand image in the local markets and highly competitive management.
Group1 Automotive has also established geographic and brand diversity by acquiring large and profitable dealerships in new regions. It has retained its man-power to take advantage of their understanding of local markets and save costs in training new recruits. It has more than 100 dealerships divided into west region, central region, southeast region and northeast region in United States.
In the year 2006 Group1 Automotive based its operations on a new operating model which was a strategic move to provide greater control and standardization in the dealership operations. The company earlier had 13 operating platforms which are now consolidated into four operating regions each led by a Regional Vice-President who is required to report directly to CEO of the company. ADP is now made the sole supplier of all the dealership management system. This has led to cost savings and implementation of common payroll system. They have also established common account system to benchmark revenue and cost performance, enabling comparisons between different dealerships. In 2007, the company has continued its efforts to increase operational efficiency and standardized its operations.
Future
In the year 2007 the company plans to move ahead by integrating the dealerships by achieving uniformity and standardizing various operations. Benchmarking best practices among all the dealerships and creating environment to follow those practices is another goal of the company. The company plans to expand further by acquisition and reducing cost by centralizing certain administrative activities. It will focus on improving used vehicles sales and replacement part management. The company will also make efforts to increase retention of existing customers.
Languages
English
Address
- 800 Gessner, St 500
- Houston TX 77024 US
Additional Information
Related Domains
External Links
- Stock: GPI
- Alexa: Group1Auto.com
- WHOIS for Group1Auto.com
