Group 1 Automotive’s UK division saw a 94% revenue increase and more than doubled its gross profit in the first half of 2025, driven by strong retail volume growth and rising profitability in finance and aftersales.
Group 1’s H1 UK revenues rose from $1.6 billion (£1.18bn) to $3.1bn (£2.3bn). On a constant currency basis, revenues were up 89%, reflecting significant improvements across all departments.
Gross profit in the UK jumped 109.6% to $424 million (£313m), accounting for around 45% of the group’s total gross profit increase for the period.
Gross margin in the UK improved from 12.6% to 13.6%, aided by a shift in sales mix and improved efficiencies in aftersales.
The business has been rolling out a restructuing programme in the UK since August last year, which saw 370 jobs at risk as of the end of June this year.
Group 1 has been integrating Inchcape UK’s dealerships into the group following a £346m deal first announced in April last year.
The business has reviewed all of its corporate support functions”to ensure that we remain in a strong position to serve our customers and OEM partners effectively”.
A spokesperson for Group 1 gave some more context around reshaping the UK business: “In line with other retailers, we continue to face cost headwinds relating to tax increases announced in the last Budget, and in response we have identified opportunities to remove duplication, streamline processes and decentralise certain roles to drive efficiencies across the business.”
New and used sales nearly double
Retail sales of new vehicles in the UK increased 90% to 32,960 units, while used vehicle retail sales climbed 89.5% to 41,580 units. Wholesale used volume more than doubled, rising 141% to 13,506 units.
Average selling prices also increased. New vehicle retail average sales price (ASP) rose to $45,327 (£33,475), up 2%, while used vehicle ASP reached $30,261 (£22,348), up 7.4%.
Gross profit per unit for new vehicles increased by 5.4% to $3,243 (£2,395), while used unit profitability dipped slightly to $1,336 (£987), down 3.2%, indicating higher volumes were partially offset by tighter margins.
Aftersales and F&I drive profitability
Group 1’s UK parts and service revenue more than doubled, increasing 105% to $323.7m (£240m), with gross profit climbing 107% to $185.1m. Gross margin in aftersales rose to 57.2%, up slightly from 56.6% last year.
Finance and insurance income in the UK soared 135.5% to $79.5m (£59m), with gross profit per unit rising to $1,067 (£788), a 24.2% increase. The business said that F&I in the UK has been a standout contributor to overall profit improvement.
Restructuring costs
Despite record revenue and profit, selling, general and administrative (SG&A) expenses in the UK more than doubled to $344.3m (£254.2m), representing 81.2% of gross profit, up from 79.5% in H1 2024.
Group 1 noted that $18.7m (£14m) in restructuring charges were recorded in the UK in the first half, including site closures and workforce realignment.
Two Mercedes-Benz dealerships were closed during the second quarter as part of ongoing efforts to optimise the group’s UK portfolio.
Further cost optimisation is expected through the remainder of the year, although the group described future restructuring activity as “less significant”.
Market remains challenging but outlook improving
Group 1 president and chief executive Daryl Kenningham said the UK market remains challenging, citing industry volumes and margin pressure due to the ZEV mandate.
He said: “Integration efforts are largely complete and most UK brands are performing to expectations, with positive momentum anticipated in the second half of the year.
“SG&A leverage improvement remains a focus in the U.K., with room for further gains.
“We’ll continue to pursue balanced growth while executing opportunistic share repurchases.
“Additionally, we’re actively reviewing underperforming stores and developing appropriate plans.”