Marshall Motor Holdings becomes Volkswagen’s largest UK dealer after buying eight more sites for £22.3m
Marshall Motor Holdings has been on a Christmas shopping spree, buying up eight Volkwagen franchises from Jardine Motor Group for £22.3million.
About 400 employees at the sites will transfer to Marshall as part of the acquisition, which makes the company Volkswagen’s largest UK partner, with 53 locations.
Marshall Motor Holdings CEO Daksh Gupta said the acquired businesses were loss-making, but he was confident they could be turned around.
The deal covers six Volkswagen car franchises in Aylesbury, Harlow, Letchworth, Loughton, Milton Keynes and St Albans, a Volkswagen commercial vehicle franchise and bodyshop in Loughton and a ŠKODA car franchise in Milton Keynes.
Their combined revenue for 2017 was £196.1m and £212.8m for 2018, with a loss before tax of £3.3m and £2.8m respectively.
Marshall told shareholders it expects the sites to make positive contributions from 2022 onwards, once operational performance had been improved.
Mr Gupta said: "I am delighted that we have further strengthened our already excellent relationship with Volkswagen Group UK with this acquisition.
“While the acquired businesses are currently loss making, we are confident in their future potential. The businesses are in excellent locations that are contiguous to our existing Volkswagen and ŠKODA franchises and each site is fully compliant with the latest brand requirements.
“It is an exciting time to extend our partnership with Volkswagen Group UK as the impact of its significant investment in electrification and mobility services will be demonstrated.
“We are extremely proud to represent Volkswagen Group and wish to thank the UK management teams of each brand for their support for this acquisition.”
The fee includes £13million in cars, parts and stock..
Jardine operates a Volkswagen-authorised repairer and approved used car operation in Towcester, which is excluded from the transaction but will be relinquished under the terms of the deal.
An Audi approved used business on the Aylesbury site will be retained by Jardeine, so completion of the acquisition of Aylesbury Volkswagen will be deferred pending completion of the legal process to sub-divide the site, which is expected by the end of 2020.
Alex Smith, managing director of Volkswagen Group UK, said: "We are pleased to have extended our relationship with Marshall, a trusted partner of Volkswagen Group here in the UK, demonstrated by the fact that it is now our largest partner in the UK by number of locations.
“Marshall has demonstrated its commercial and customer focus capabilities over the long term and we are confident in its ability to maximise the operating performances of these businesses.
“The Volkswagen Group is investing significantly in its future product portfolio and having strong retail partners such as Marshall is key to delivering these exciting new products to our customers."
Volkswagen Group is due to invest €60bn in e-mobility, hybridisation and digitisation between 2020 and 2024, with the Volkswagen ID.3 model scheduled for release in the UK in 2020.
Marshall is also expected to complete negotiations to acquire the Volvo franchise in Derby by the end of this year.
That will cap a busy year of acquisitions for the fast-growing group.
In March, Marshall acquired six ŠKODA franchises through two acquisitions, making it the largest ŠKODA retailer in the UK.
In September, the group bought two Honda businesses in Reading and Newbury from Jardine. Marshall remains the second largest Honda partner in the UK.
It also opened a Volkswagen Commercial Vehicles site in Lincoln in October, on an existing site made vacant by the relocation of the group's Jaguar and Land Rover businesses to a new 'Dual Arch' site in Lincoln earlier in the year.
The Honda acquisitions and Lincoln Volkswagen Commercial Vehicles site are predicted to contribute around £30m in revenue next year, and make a profit beyond 2020 .
Marshall also has a new partnership with LEVC, the manufacturer of electric London taxis owned by Geely Automotive Holdings. The group represents the LEVC brand in Nottingham, from Marshall’s Volvo franchise.
The Society of Motor Manufacturers and Traders forecasts the UK new car market to decline 2.8 per cent in 2019 and fall 4.4 per cent in 2020.
In a brief trading update, Marshall Motor Holdings said it had “performed well” in “challenging” market conditions.