Why Sytner’s acquisition of The Car People makes sense

Sytner’s acquisition of The Car People makes perfect sense and is part of a wider trend that has seen franchised dealers increasingly concentrate on growing their used car businesses in recent years.

The deal follows Sytner’s purchase of the successful CarShop business in January and now sees it owning two of the biggest car supermarkets in the newly published Motor Trader Top 50 Independents. The purchase increases Sytner’s supermarket sites from five to eight.

The multi-franchised used car supermarket is an area of interest for franchised groups and has prompted many notable players, including Pendragon, Arnold Clark, Marshall and Peter Vardy, to launch their own outlets. Vertu, however, bucked the trend by exiting its Motor Nation business back in 2014.

Sytner, the UK’s biggest dealer group, has taken a different route by buying established businesses. It’s a model that has worked well for its Penske parent in the US which acquired the large CarSense group in December 2016 as part of its diversification programme which has seen it move into truck sales.

The addition of The Car People adds a business that sells 18,000 vehicles a year and generates £225m in revenue.

Both are also scalable businesses. Sytner has hinted at opening more CarShop sites and was reportedly eyeing a greenfield site in the south of England as well as expanding into Northern Ireland.

The Car People acquisition is perfectly in tune with a sector that is realising the benefits of used car sales as the new market drops to a more natural and sustainable level.