The 401 Group of Corporations is almost doubling its portfolio of new-car dealerships with two acquisitions accounting for seven shops in southern Ontario.
The offers solidify the Cambridge, Ont.-based firm’s standing as a “rising group that’s trying to broaden throughout the Canadian market,” stated Ted Lancaster, the dealership group’s govt vice-president of enterprise improvement, and mergers and acquisitions.
The 401 Group — now with 16 shops — brings 4 new car manufacturers beneath its umbrella with the 2 transactions, which it hopes will create additional alternatives because it pushes to broaden.
“Whereas our focus has been in Ontario, we’re not going to be restricted by one single province and even nation,” Lancaster stated. “We predict there’s alternative to proceed to diversify and develop.”
Monetary phrases of the 2 offers — one for six shops, the opposite for a single dealership — weren’t disclosed.
SIX PLUS ONE
The 401 Group signed the bigger of the 2 buy agreements with longtime eastern-Ontario vendor Jimmy Lapointe. The deal, accomplished Nov. 30, consists of Lapointe Chrysler-Dodge-Jeep-Ram, Pembroke Honda, Pembroke Nissan, Peterborough Hyundai, Peterborough Subaru and Renfrew Chrysler. Three different Jimmy Lapointe’s Automotive Group dealerships weren’t included.
The 401 Group’s preliminary provide was for 2 shops, Lancaster stated, however that expanded to 6 as the 2 events labored towards an preliminary handshake settlement. As a part of the deal, a lot of the workers will be part of the 401 Group, he stated.
On the other facet of the Larger Toronto Space, the 401 Group acquired family-run Stratford Hyundai from Todd Saunders in a transaction that closed on the finish of October, Lancaster stated.
The 2 purchases will present larger model variety. Earlier than the 2 offers, six of the corporate’s 9 shops have been Kia franchises.
Previous to becoming a member of the 401 Group in 2018, Lancaster was COO of Kia Canada from August 2015 to October 2018. The group, which acquired its first Kia retailer in Tillsonburg, Ont., had been “heavy” on the South Korean model, largely due to the great relationship it has constructed with the automaker, he stated.
SMALL-MARKET SUCCESS
Whereas the corporate’s affiliation with Honda, Nissan, Stellantis and Subaru is new, the smaller-town markets through which the shops are located are acquainted. Aside from one Mississauga, Ont., dealership, Lancaster stated, the 401 Group has averted metro markets as a part of its technique.
“We’ve confirmed we are able to go into these smaller markets and improve the amount of gross sales, improve retention, [and] Google scores,” he stated. “I believe total, we’ve confirmed our mannequin, and now we simply wish to proceed to develop and develop it.”
The 401 Group won’t be overhauling operations on the dealerships it acquired, Lancaster stated, however will combine some new methods, plus an in-house lead-generation device it has constructed to prioritize new purchasers.
The group now now represents 60 manufacturers of auto, leisure car, marine and energy sports activities shops beneath its 39 Ontario rooftops and employs greater than 800 workers all its companies.
EYEING U.S. EXPANSION
The dealership group can also be scouting alternatives in america because it has watched the Steele Auto Group, AutoCanada Inc. and HGrégoire efficiently transfer south, Lancaster stated.
“There’s plenty of teams on the market which have branched outdoors their authentic province of operation and located nice success, and I believe that’s one thing that for us to proceed to develop and develop the enterprise we must be open to,” he stated.
Whether or not the 401 Group will first transfer into america or broaden into one other Canadian province is “nonetheless to be decided,” Lancaster stated, however “someday within the subsequent 12 months or so, we’ll most likely step out of our consolation zone.”