Group 1 UK is to part ways with the JLR franchises as it continues to restructure its UK operations.
It said it is continued to work with other carmakers and it expected this to result in the sale or closure of additional points
In a statement accompanying £3 results, it said: “The U.K. economy continues to face challenges, including persistent inflation, elevated interest rates, rising energy costs and a slowdown in consumer spending. These factors have contributed to margin compression and increased operating expenses within the automotive retail industry.
In addition, as part of our ongoing portfolio optimization, we informed our OEM partner, JLR, of our intention to sell or relinquish our U.K. JLR franchise operations. We continue to work with other OEM partners to evaluate our portfolio, which we expect will result in the sale or closure of additional points.”
Group 1 UK saw pross profits increase 17.3% to $204.7m on turnover ahead 20.4% to $1.5bn in Q3.
It recorded goodwill, franchise rights and fixed asset impairment charges of $123.9m related to the U.K. for the current quarter.
Group 1 also recognised $1.6m in restructuring charges in the UK in the current quarter, from job cuts and site closures.
Year to date, it has recognized $20.3m in UK restructuring charges. It anticipates implementing further restructuring plans in future periods to reduce costs.
“The U.K. market remains challenging, with softer industry volumes and continued BEV-related margin pressure.
“We are taking steps to strengthen our U.K. portfolio, and we continue restructuring efforts to make the business more efficient.
“With our portfolio optimization efforts, including leveraging Aftersales and F&I as growth levers, we will be positioned to emerge stronger as the market stabilizes,” said Daryl Kenningham, Group 1 president and CEO.
