“Other buyers from Europe, Middle East and South Africa are also established in the UK and known to be acquisitive.”Īcquisitive UK-based car retailers have recently told AM of their difficulty in negotiating purchase prices for new businesses which have seen industry headwinds drive their profitability to record levels in the post-COVID period. Today that conversion stands at circa $460m or a 20% discount.”Ĭassels added: “When you also consider that UK property is still seen as a growth asset class in the long term then it’s no wonder that there is appetite to expand into this sector. “The offer amounted to circa £400m which would have been around $580m less than a year ago. If we consider Lithia’s recent offer to the Pendragon PLC shareholders of £0.29 per share in the context of the depreciating pound it’s not difficult to see why there is an appetite for foreign investment.
“In the context of dealer acquisition this is significant. In 2014 a pound was worth $1.7 whereas now we appear to be approaching currency parity. “The buying power of a US based auto investor has never been stronger. We’ve seen activity that would seem to back this up with acquisitions by Group 1 Automotive, Supergroup and a failed bid for Pendragon by US based Lithia Motors. “This might be depressing news for some FOREX traders but it represents a huge opportunity for some foreign investors. Increasing numbers of franchised car retailers are considering exit strategies as economic pressures and agency model doubts plunge the sector into a period where uncertainty is now the norm, MHA has suggested.Īnd the consultancy firm suggested that macroeconomic factors causing investors to “carefully consider their future strategies” could trigger a new period of mergers and acquisitions as overseas investors start to eye opportunities in the UK retail sector with interest.Īlastair Cassels, MHA’s head of automotive advisory, said: “The changing of the UK Prime Minister has resulted in the pound slumping to 37-year low against the US dollar. The ID50 2019 – the UK's 50 biggest independent dealers.Manufacturer insight - new car sales figures.Apprenticeship levy: car dealer resources.
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