7:00 am, August 18, 2026
The mergers and acquisitions market for UK car dealers is facing one of its toughest periods in a decade, with the influx of new Chinese brands fuelling uncertainly among investors.
That is according to one industry expert, who says that backers want to know which brands will last before putting money into the UK motor trade.
David Kendrick, managing director – wealth at Cooper Parry, said current activity is ‘very limited’ when it comes to mergers and acquisitions (M&A).
He told Car Dealer that, amidst wider economic uncertainty and rapid changes in manufacturer market share, his firm currently has 12 deals that are stalling.
‘The current climate is relatively challenging for M&A activity, probably as difficult as it has been in 10 years,’ he said.
‘We have over 12 mandates currently on our books that aren’t moving.
‘A significant factor is the influx of new Chinese automotive brands entering the UK market, which is creating uncertainty around which manufacturers will emerge as long-term winners.
‘At the same time, there has been limited acquisition activity from the larger dealer groups, while broader economic uncertainty and mixed business performance across the sector are causing both buyers and sellers to adopt a more cautious approach.
‘As a result, transaction activity continues but on a very limited basis, with decision-making taking longer and buyers being increasingly selective.’
Kendrick’s thoughts were echoed by his colleague at Cooper Parry – Auto M&A specialist, Sam Rotherham.
He said that a growing gap between sellers’ expectations and buyers’ willingness to pay is currently preventing more deals from getting over the line.
Despite this, he told Car Dealer that established dealer groups remain open to acquisitions, particularly in areas where they could expand geographically or strengthen relationships with key manufacturers.
Middle Eastern money to come?
One of the biggest stories in the motor trade over recent years has been the arrival of large North American dealer groups, buying up British firms.
Deals have included Pendragon being bought by Lithia, Inchcape’s retail operation going to Group 1 and Lookers being taken over by Canada’s Global Auto Holdings .
The experts we spoke to said UK market remains attractive to overseas investors, although the pace of major deals has slowed.
They also highlighted a rise of interest from the Middle East as something to keep an eye on, despite continued interest from America.
Steve Young, executive chairman of ICDP, said: ‘I would not rule out the possibility of AutoNation joining the other big North American firms, but those that are already here seem to be in a rationalisation mindset rather than adding more sites.
‘However, there is still new money coming from other overseas investors based elsewhere in the world – the Middle East and Asia primarily, with probably more to come from Van Mossel.’
Kendrick added: ‘There remains interest from larger strategic buyers, including international groups, in the UK automotive retail sector.
‘The UK continues to offer scale, established franchise networks and attractive long-term fundamentals. That said, larger transactions are naturally more challenging to complete due to a small number of businesses available that offer scale, ongoing management teams and attractive entry costs.
‘We have seen Van Mossel and Al Ghandi recently come into the market, demonstrating this remains appealing to the right business.’
What next for Vertu?
With the likes of Marshall, Lookers and Pendragon all going private in recent years, several have questioned whether a takeover could also be on the cards for Vertu.
Now the biggest publicly listed car dealer in the UK, the firm has previously been described by experts as a ‘sitting duck’ for overseas investors.
Earlier this year, Constellation Automotive Group upped its stake in the Car Dealer Top 100 firm, leading to rumours that a full acquisition could be possible.
However, Young urged caution over reading too much into the move.
‘I would not take the increase by Constellation of their shareholding in Vertu as a sign that they will be making a bid,’ he said.
‘I think we’ll see a few multi-site deals involving the sale of mid-size groups to existing or incoming investors – tens of dealerships rather than single-figure smaller groups.
‘But in terms of the acquisition of a larger £1bn-turnover group, I think that’s less likely.’
Looking ahead, Kendrick expects the subdued M&A market to continue over the next year.
‘Activity is likely to remain limited over the next 12 months,’ he said.
‘While consolidation remains a long-term theme within the sector, the pace of larger transactions may be constrained by ongoing economic uncertainty, cautious buyer sentiment and questions around the long-term positioning of certain brands.
‘Strategic acquisitions will continue, but we expect buyers to remain highly selective.’