October 2020 Dealer Group Updates Webinar – continued growth of the largest European businesses
ICDP continues to track the main performance KPIs and strategic trends of the largest European dealer groups by revenue. In this webinar, we showed some preliminary findings ahead of publishing the 2020 edition of the European Top 50 in November. The groups are ranked as usual by annual revenue in Euros. As many businesses operate in other industries too, the large revenues have been split by automotive activities as best as possible.
As in previous years, Emil Frey Group (Switzerland) leads the ranking, benefitting from substantial (mainly import) acquisitions throughout 2019 to stabilise their position, and even shows a growing y-o-y gap to ranking position 2. UK dealer groups feature strongly within Top 10, whilst French players feature more towards the ranking positions 26-50. We see that over-proportional growth is coming from the bottom of the ranking, shifting the ranking entry barrier in terms of revenue further to nearly € 1bn – a massive increase compared to 2016.
French players seem to have the biggest appetite for (mainly national) acquisitions but not only in terms of the number of deals seen, but also when it comes to the number of relatively larger deals, followed by The Netherlands and UK based companies.
Overall, the major groups constantly increase their weight on a pan-European basis in terms of markets share of new car sales sold, in part-pursuing cross-border strategies, and we expect this to continue.
However, size does not necessarily equal performance. Profitability has been challenging for all dealers even before Covid, including the largest groups which tend to outperform the average dealer slightly in their main market. In the face of the crisis, they at least have in theory better opportunities to cope and to continue developing elements for omni-channel retailing, as opposed to the smaller or medium-sized players which come more and more under pressure and/or are preparing to sell.
The role of the top groups in network restructuring and evolution potentially even increases under the current circumstances and they remain indispensable to OEMs when it comes to put their network plans into practice and make the transition to omni-channel retailing happen – whether this will be under the franchise or the agency business model.