Group 1 reveals 17,000 six-month order bank for new cars

Group 1 in the UK has a back order for 17,000 new cars going into 2023 as it deals with supply constraints.

“Our new vehicle order bank of 17,000 units represents more than a six-month backlog based on first half unit sales,” said Group 1 CEO Earl Hesterberg.

“We continue to believe the pent-up demand built over the past several years due to both Brexit and the very strict pandemic lockdowns will help drive strong UK vehicle demand well into 2023,” he added,” told analysts in the US in a Seeking Alpha transcript.

Hesterberg said the group was sourcing older cars as the supply of nearly-new vehicles had dried up.

“Like all used cars, they are scarce, but the lower price used cars are the most scarce in my observation.

“It’s a lot of nearly new used vehicle sold in the UK in the normal market. And that market is dried up because of the lack of supply of new vehicle.

“So, we’re selling continually older lower priced used cars in the U.K. But prices are increasing, our reconditioning cost, and so forth. So, that’s another factor that’s put a little pressure on our used vehicle margins.”

Group 1 revealed second quarter earnings up 14.3% to $4.1bn (£3.4bn) with gross profit up 18.3% to $768.4m.

In the UK second quarter earnings were up 1.1% $708.2 with gross profit up 4.2% to $92.1m.