Careers at Group 1 Automotive

MISSION

Group 1 Automotive Inc (“Group 1”) operates a network of car dealerships.  It aims to maintain its position as a leading retailer of used and new vehicles, and to offer consumers an enjoyable and informative purchasing experience.

FOUNDING STORY

Group 1 was formed in 1995 by Ben Hollingsworth Jr.  It became a public company in 1997, having acquired founding dealerships owned by businessmen Bob Howard, Sterling McCall, Kevin Whalen, and Charles Smith.

In its initial public offering, the Company priced its shares at USD 12 and raised a reported USD 57.6 million.

Group 1 used the proceeds from its initial public offering to embark on a series of acquisitions.  It quickly completed four acquisitions at the cost of approximately USD 56 million in cash and stock.

Two of these acquisitions were of platforms: Carroll Automotive Group, operating Ford dealerships in Miami, Atlanta, and Fort Lauderdale, Florida; and Maxwell Automotive Group, which owned Chrysler Plymouth, Subaru, Jeep, Eagle, and Dodge dealerships in Austin and Taylor, Texas.

The two other purchases were of Elgin Ford in the Austin area and Autoplex 2000, which operated Mercedes-Benz, Dodge, Nissan, Volvo, and Buick franchises.

Group 1 has continued to expand its dealership network into the twenty-first century, including expanding its operations into Brazil and the UK.

At 8 February 2018, Group 1 owned and operated 175 automotive dealerships, 230 franchises, and 48 collision centres across these international markets.

Group 1 is ranked 273rd on the Fortune 500 list and has a current market capitalisation of approximately USD 1.47 billion.

Business model of Group 1 Automotive

Customer Segments

Group 1 sells a wide range of cars and automotive vehicles to customers across multiple segments, but primarily general consumers.

The company’s core customers can be organised broadly into the following customer segments:

  • General Consumers, comprising members of the general consumer population – including lower, middle income, and upper income consumers – who purchase both used and new vehicles from the Company’s dealerships;
  • Commercial Enterprises, comprising medium and large companies across a range of sectors that purchase vehicles from the Company for corporate purposes; and
  • Fleet Management Companies, comprising car service companies and car rental businesses that use vehicles purchased from the Company for commercial purposes.

Group 1 serves a large international customer base.  The Company’s domestic US market remains its principal area of operation.

The Company, however, also serves customers in Brazil and the UK.

Value Propositions

Group 1 provides value to its customers in the following ways:

  • Trust and Reliability – Group 1 ensures that customers can trust the products that it sells by offering extended warranties, vehicle history reports, certifications, and other documentation for all of the vehicles sold across its dealership network;
  • Broad Sales Reach – Group 1 has an extensive sales and service reach spanning the US, Brazil, and the UK, and comprising 175 automotive dealerships, 230 franchises, and 48 collision centres, ensuring that it is able to serve customers quickly and efficiently;
  • Wide Range of Vehicles – Group 1 offers a wide range of vehicle types, models, and brands, including vehicles produced by Audi, BMW, Cadillac, Chevrolet, Dodge, Ford, Nissan, Jaguar, Jeep, Land Rover, and Mercedes, among others;
  • Ongoing Support – Group 1 provides customers with ongoing service throughout the lifespan of its vehicles via its servicing solutions, collision centres, and financial services, ensuring that customers receive ongoing support; and
  • Size and Standing – Group 1 is among the largest automotive dealership in the US, with a growing presence in Brazil and the UK, and has a reputation for providing good quality products and reliable services.

Channels

Group 1 makes its sales to customers through its international network of dealerships.

The Company’s principal sales channels comprise 42 auto dealerships in the UK, 16 auto dealerships in Brazil, and 117 auto dealerships across 15 states in the United States, through which it sells 32 brands of new vehicles.

In addition to its core New Vehicle and Used Vehicle sales channels, the Company operates two further business lines: Parts and Service, comprising a network of service and collision centres, through which the Company offers maintenance and repair services; and Finance and Insurance, through which the Company offers various financial and insurance products through a designated sales force.

Customer Relationships

Group 1 seeks to establish longstanding relationships with its customers, offering a number of ancillary and after-sale services, including financial, maintenance, and repair services.

The Company’s seeks to provide a tailored and personalised purchasing experience across its network of dealerships, with its trained sales personnel offering customers expert advice and guidance to support appropriate purchasing decisions.

Group 1 operates a website at www.group1auto.com, through which it provides customers with information pertaining to its locations, vehicles, and structure on a self-service basis.

The Company notably hosts vehicle search and dealership locator services on its website, enabling customers to find dealerships close-by and to find specific models of cars that are available.

Additionally, Group 1 is able to interact directly with its customers via its various social media accounts, including with Facebook, Twitter, Instagram, and LinkedIn.

Key Activities

Group 1 is a leading international operator of dealerships in the automotive retail industry.

Through its network of dealerships, the Company sells new and used cars and light trucks, arranges related vehicle financing, sells service and insurance contracts, provides automotive maintenance and repair services, and sells vehicle parts.

The Company organises its operations into three regional operating segments  through three segments: the US, the UK, and Brazil.

The Company owns and operates more than 230 franchises, representing 32 brands of automobiles, at 182 dealership locations and 48 collision centres across its operating markets.

The Company's operations are primarily located in metropolitan areas in the US, including in Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, Oklahoma, South Carolina, and Texas.

Key Partners

Group 1 works closely with a wide network of partners to ensure that it has a large catalogues of vehicles to offer its customers and can do so reliably and efficiently.

These partners can be organised broadly into the following categories:

  • Supplier and Vendor Partners, comprising suppliers of equipment used across the Company’s offices and dealerships, as well as providers of third party services that support the Company’s corporate activities;
  • Manufacturer Partners, comprising manufacturers of automotive vehicles and vehicle parts that are sold by the Company across its network of dealerships and collision centres in the US, Brazil, and the UK;
  • Franchise Partners, comprising various commercial enterprises and business figures that operate car dealerships under the Group 1 brand and on the Company’s behalf name under individuals franchise agreements; and
  • Strategic Partners, comprising a range of other commercial enterprises with which the Company collaborates on business development and marketing projects across its core markets.

Group 1 has a number of partnerships in place.  It has partnerships with a number of automotive manufacturers, including high-profile names such as BMW, Mercedes, Chevrolet, Ford, and Porsche.

The Company notably agreed a partnership with Audi in 2018 to launch the Audi Select vehicle subscription service.

Key Resources

Group 1’s business model is dependent on its ability to provide a wide range of high quality vehicles to customers reliably and efficiently.

As such, the Company’s key resources are its catalogue of vehicles, its manufacturing partners, its franchise partners, suppliers and supply chain, its physical retail and service assets, its personnel, and its IT and communications infrastructure.

Cost Structure

Group 1 incurs costs in relation to the procurement of vehicles and equipment, the procurement of third party services, the management of its partnerships – notably those with its manufacturing partners and franchise partners, the operation of its physical locations – including occupancy and utility costs, the development and maintenance of its IT and communication infrastructure, the implementation of marketing and advertising campaigns,  and the payment of salaries and benefits to its personnel.

In 2018, Group 1 recorded total annual selling, general, and administrative expenses in the amount of USD 1.27 billion.

The Company’s total cost of sales for the year was recorded at USD 9.88 billion.

Revenue Streams

Group 1 generates revenue primarily through the sale of automotive vehicles to consumers and commercial enterprises across its international network of dealership.

The Company derives its revenue primarily under sales and lease contracts arranged directly with customers.  It also derives a portion of its revenue via the sale of financial products, vehicle parts, and maintenance services.

In 2018, Group 1 recorded annual revenue totalling USD 11.60 billion, up slightly on the USD 11.12 billion recorded by the Company in 2017.

The bulk of the Company’s revenue was generated through its US operations, which alone accounted for USD 8.72 billion.

The Company’s sale of new vehicles also notably accounted for more than half of its annual revenue for 2018.

Our team

Earl J. Hesterberg,
President and Chief Executive Officer

info: Earl J. Hesterberg (“Hesterberg”) has served as Chief Executive Officer at Group 1 since April 2005. He is responsible for leading the Company’s overall strategic direction and functions as the Company’ key decision maker concerning strategy. Hesterberg also serves on the Board of Directors at Stage Stores Inc, and the Greater Houston Partnership, and on the Board of Trustees of Davidson College. Hesterberg has held senior positions within the automotive industry for a number of years. His early career included spells in management roles at Nissan Motor Corporation in USA and Nissan Europe, both of which are wholly owned by Nissan Motor Co. Limited. Hesterberg went on to serve as President and Chief Executive Officer at Gulf States Toyota, and from 1999 to 2004, served as Vice President of Marketing, Sales and Service at Ford of Europe. From 1999 to 2005, he was also a member of the Supervisory Board at Ford Werke AG. Prior to joining Group 1, Hesterberg served from 2004 as Group Vice President for North America Marketing, Sales and Service at Ford Motor Company.

John C. Rickel,
Senior Vice President and Chief Financial Officer

info: John C. Rickel (“Rickel”) has served as Senior Vice President and Chief Financial Officer at Group 1 since joining the Company in December 2005. He is responsible for leading the Company’s various financial management functions, including oversight of the Company’s internal audit, accounting, investor relations, and tax units. Prior to joining Group 1, Rickel was a long-serving employee of Ford Motor Company and its subsidiaries. He first joined Ford Motor Company in 1984, and went on to hold positions of increasing responsibility, including spells as Chief Financial Officer of Ford Europe, Chairman of the Board of Directors of Ford Russia, and member of the Board of Directors and the Audit Committee at Ford Otosan. His most recent role before joining Group 1 was as Controller of Ford Americas, where he was responsible for the financial management of Ford’s western hemisphere automotive operations.

Daryl Kenningham,
President of US Operations

info: Daryl Kenningham (“Kenningham”) has served as President of US Operations at Group 1 since April 2017. He is responsible for overseeing the day-to-day management of the Company’s activities in the US market. Kenningham joined Group 1 in 2011 as Vice President for the East Region, and served as Vice President of the West Region before assuming his current position. Kenningham began his career in 1988 at Nissan Motor Corporation, where he held a number of field and national office roles. In 1995, he joined Nissan Motor Limited as Coordinator for US Operations, and in 1997, he joined Nissan North America as Category Marketing Manager. Kenningham went on to serve consecutively as Vice President of Planning at Gulf States Toyota, President at GST Transport Services, and President at Gulf States Financial Services. Prior to joining Group 1, Kenningham served for almost three years as Senior Vice President at Gulf States Toyota.

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