Pendragon to close some premium dealerships and focus on used cars
Car firm Pendragon is to shut dealerships in Britain and offload its US division following a profit warning in October and a slowdown in UK new vehicle sales.
The company said that following a strategic review of the business, it will "reduce" the number of its premium brand franchises over the next three years.
A total of 70 Pendragon dealerships under its Stratstone brand house marques such as Aston Martin, BMW, Ferrari, Jaguar and Porsche. The likelihood is there will be fewer of these in the future.
Currently there are two Stratstone dealerships in Lye, in Stourbridge Road and Grange Lane, a Stratstone Harley Davidson in Chapel Ash, Wolverhampton, and the newly opened Porsche Centre just off Junction 2 of the M54 in Wolverhampton.
The former Stratstone Jaguar dealership in Stafford Street, Wolverhampton, is now owned by Lancaster, part of the Jardine Motors Group.
No figures have been revealed for how many dealerships will be closed.
Pendragon will instead focus on the used car market, where it trades as Evans Halshaw with 118 dealerships and is aiming to double revenue by 2021, opening another 30 sites.
Locally there are Evans Halshaw branches at Walsall, West Bromwich, Stourbridge, two in Wolverhampton – on Birmingham Road and Bilston Road – and one at Worfield in Shropshire.
Pendragon also announced that it will offload its US division, from which it expects to bank over £100 million.
"Given the strong performance of this division, we have concluded it is economically right to sell the business at this time to realise its value," the firm said.
The decisions follow an October profit warning which sent Pendragon's share price tumbling, with boss Trevor Finn pointing to a decline in demand for new cars amid falling consumer confidence.
He also said "certain manufacturers" were forcing vehicles into the market despite "softening demand".
It also comes after dire November figures from the Society of Motor Manufacturers and Traders (SMMT), which showed that Britain's new car market declined for a seventh consecutive month.
Mr Finn added: "Following our strategic review, we have focused on reshaping the business to accelerate transformation and ensure capital allocation is optimised across the group.
"The actions I am announcing today are a further step towards achieving our strategic objectives.
"I believe this strategy will provide more reliable and sustainable returns."
