When will we see the first UK £10bn supergroup?

  03 May 2020


Saturday’s news that Pendragon, under the command of new CEO Bill Berman, made an approach to Lookers with a view to merge the two firms is interesting on several counts.

Firstly, there’s the timing. As one analyst told Auto Retail Agenda: “It’s odd, to me, given all dealers will be burning cash and should be focusing on how they get out of this.”

Of the retailers we’ve spoken to, it seems there’s a split between those that have kept as much open as possible but are still “burning cash”, and those that have almost entirely put their businesses on hold to save as much cash as possible.

As part of the research around this, I thought I’d see if any of my local franchised retailers for my own car were taking service bookings – my car’s service (and MOT) is due in mid-June.

Only my fifth nearest was open at all, and even then, only for essential worker vehicles. My need isn’t urgent, so I left it. But as soon as more retailers open, I’ll be glad to give them my business again. I suspect many others feel the same.

Back to Lookers and Pendragon, the proposal was also interesting because it was rejected due to the timing – it was suggested Lookers was too busy dealing with coronavirus, and also the ongoing FCA investigation over finance sales.

This seems to suggest the deal could be back on at a later date.

The third interesting point is that the emergence of a £10 billion turnover ‘supergroup’ is highly likely, and that the coronavirus pandemic has probably sped up the timetable for such a retailer. As in any financial crisis, those with deep enough pockets will see opportunity.

More than one leading industry figure I’ve spoken to recently has said they expect such a group to emerge before the end of 2020. This latest approach makes me think this is a fairly safe bet.

Tristan Young

Editorial director

Auto Retail Network

Start your free 14 day trial

Get free access to our Bulletin, Agenda & Profit for 14 days.

After 14 days we will auto bill your credit or debit card unless the order is cancelled.

As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:

  • Get informed and boost your business potential
  • More than 1,200 fellow executives have joined us
    since launch
  • Independent, carefully crafted, unique content relevant to you and your business
  • Develop a greater awareness of market trends and opportunities
  • Access to a wide range of materials whenever, wherever and however you want it
  • Significant discounts on ARN events, reports and
    other publications