Penske Automotive has expanded its auto retail network in Europe with outlets such as the Audi City London.
Penske Automotive's expansion into mainland Europe has helped the U.S.-based company to become Europe's biggest independent dealer group by sales revenue. Penske took the No. 1 spot from Pendragon in the 2016 Guide to Europe's Biggest Dealer Groups compiled by automotive distribution researchers ICDP for Automotive News Europe.
Penske's growth is part of a wider trend in Europe. "There continues to be a significant number of dealer group consolidations through mergers and acquisitions," ICDP Managing Director Steve Young said.
In 2014, Penske had climbed to No. 2 in the ranking based on its ownership of Sytner Group in the UK. Last year it took majority control of Germany's Jacobs Gruppe. The company also bought new dealers in Spain and Italy. With its new acquisitions, Penske boosted revenue to 6.4 billion euros.
Automakers are continuing to divest or consolidate low-margin company-owned dealerships to focus on profitability of their manufacturing operations. This is helping large independent dealer groups, Young said. "Automakers can appoint them to an under-performing location with confidence that it will be a second-quartile performer in six months," he said.
A rebounding auto market helped dealers. European new-car registrations rose 5.7 percent to just under 15 million in 2015. The top 50 groups took 10.4 percent of those sales, up from 10.1 percent in 2014. The low share reflects the fact that many new cars are sold through family-owned operations with one or two outlets.
Average revenue for groups in the top 50 ranking increased 15 percent to 1.8 billion euros from 2014, ICDP calculated. Those in the top 10 increased their average revenue by 31 percent to 4.5 billion euros, while the middle-ranked players in positions 11 to 25 saw a 22 percent increase to 1.6 billion euros.
ICDP said the revenue gains are partly a reflection of the strength of the pound against the euro in recent years. Five of the 10 biggest dealer groups are based in the UK. Those gains are likely to recede following the pound's fall against the euro after the British voted to leave the EU.
Average new-car sales for the top 50 players increased by 21 percent over 2013 figures to 34,000 in 2015. Dealer groups that focused on Volkswagen Group brands had a poor year "possibly an effect of the emissions-related revelations in September," ICDP said. Examples include Dutch-based Pon Holdings, which fell three places to No. 11 and Finland's VV Auto, which dropped eight spots to 42.
Chinese enter Europe retail area as automakers exit
Daimler sold some Mercedes-Benz dealerships in Germany to a unit of China's Lei Shing Hong Group -- part of a wider trend among automakers to hand over company-owned sales operations to independent dealer groups.
Dealer activity dilutes an automakers overall profitability, ICDP Managing Director Steve Young said. "We do not see anyone looking to expand," he added.
PSA Group and Renault are reducing the number of sites by bringing their brands together under one roof. Renault is working to incorporate its low-cost Dacia brand into key Renault dealerships, while Peugeot, Citroen and DS are multi-branding in some locations.
BMW also plans to reduce its dealerships and Ford likely will step back from its TrustFord operation, which has 55 sites in the UK, Young said.
Volkswagen Group remains the biggest automaker dealer operator via the giant Porsche Holding group, which the automaker bought from the Porsche-Piech families. Porsche Holding's sales of 18.8 billion euros in 2015 far surpassed that of Penske Automotive, Europe's largest independent dealer group, which had sales of 6.4 billion euros in the region last year. Austria-based Porsche Holding has 628 franchise sites and imports VW Group brands into 17 countries, including 14 in Central and Eastern Europe. Porsche Holding sold 927,393 cars in 2015 including new and used cars, with new-car sales up 7.6 percent.
AUTOMOTIVE NEWS EUROPE