Cost-cutting aimed at saving £10 million annually from Group 1 Automotive’s UK operation are continuing to play out through the second quarter of this year to deliver benefits to the bottom line.
Group 1 Auto UK has reduced headcount by around 10% through Q1 redundancies, and is making reductions through demonstrators, managing used car stocks and other efficiencies after it was slow to react to trading conditions in late 2023 and it had become inefficient in recent years.
Daryl Kenningham, president and chief executive of USA-based Group 1, told AM the company “took a hard look at where we were”, and has identified aspects for improvement, including the need to “get smarter with back office functions”.
Its Q1 report shows its UK business achieved record revenues of $824.8 million (£663 million), marking a 4.7% increase compared to the previous year. However, gross profit declined by -6.2% to $103.5 million.
Globally, Group 1 reported a pre-tax profit decrease of -6.4% to $193.3 million, with turnover increasing by 8.2% to $4.47 billion.
Daryl Kenningham, president and chief executive of USA-based Group 1, said that the UK business had recovered well from a challenging Q4 in the previous year.
Kenningham highlighted that the UK team achieved record quarterly revenues from parts and service, new vehicle sales, and a significant increase in used vehicle sales volumes by over 19%.
Group 1 is on track to complete the acquisition of Inchcape’s UK retail business for £346 million during Q3 2024.
“We believe the UK business is well positioned and look forward to the expansion of our U.K. operations with the pending acquisition of Inchcape’s UK retail automotive business planned for Q3 2024,” he said.
