7:37 am, June 27, 2025
US giant Lithia has what it takes to rival the UK’s very biggest dealer groups as its rumoured takeover of Hatfields edges closer.
That is according to leading automotive experts, who have told Car Dealer that OEMs will be ‘keeping a close eye on things’ as the groups continues to grow its market share.
Car Dealer reported last week that Lithia was in advanced talks to acquire the Yorkshire-based Hatfields in a deal which is expected to be made official later this summer.
That follows the firm purchasing Pendragon’s UK dealer operations last year, having already acquired the likes of Jardine Motors before that.
The latest deal feels like the latest step towards the creation of a new ‘super group’ and experts say that Lithia’s growth in the UK should come as no surprise.
David Kendrick, regional managing partner at Cooper Parry, told Car Dealer: ‘The UK market has represented very good value for internationals for a long time now – the multiples when looking at potential acquisitions are far lower than other international markets like the US, coupled with an attractive exchange rate when coming in.
‘Other attractive features of the UK is the legal framework and protection that corporates enjoy compared with other countries – to do business in the UK is a relatively protected and safe economy to transact in.
‘The final point is that the UK is an island and therefore freehold property over time is typically a one-way bet – this again has attractiveness to new entrants when looking to build up an investment portfolio.’
It is a sentiment which is shared across the industry, with more and more investment coming in from North America over recent years.
Reflecting on the trend, Cox Automotive’s Phillip Nothard told Car Dealer: ‘The UK automotive retail sector remains a highly attractive opportunity for international dealer groups and investors, particularly those seeking to establish or expand their global presence.
‘Despite current economic headwinds, the UK market is seen as mature, resilient, and, in many cases, good value in terms of acquisition potential.
‘In recent years, we’ve seen that many UK dealer groups are perceived as undervalued or well-positioned for strategic integration.’
Meanwhile, Steve Young, managing director of ICDP, said that the UK offers ‘better value than opportunities in the USA’, adding: ‘It’s all “white space” from their perspective, whereas in the US they just have a strong presence in the geographies which are attractive to them.’
Why Hatfields?
So what is it about the family-run Hatfields which has attracted Lithia, and its particularly deep pockets?
For Kendrick, an expert in automotive acquisitions, the deal makes sense based on a number of factors – location chief among them.
The group also has a close relationship with JLR, offering Lithia an increased presence in the premium end of the market.
‘This gives them a Northern presence that fits nicely onto their existing footprint,’ Kendrick told Car Dealer. ‘It appears there is a keen interest in further premium brand focus with this purchase.
‘The Hatfields locations fit well sitting adjacent to their Birmingham site and North East dealerships
‘Historically they [Lithia] have been focussed on premium scaled businesses however with the Pendragon acquisition this has opened up doors to a number of other volume brands.
‘I would imagine focussing on scaled regional groups with solid foundations that can be integrated to their existing infrastructure will be the key.’
Meanwhile, Young said that Hatfields was a ‘specialist with a good reputation’, with the rumoured takeover ‘expanding Lithia’s relationships with OEMs already in its portfolio’.
He added that Lithia traditionally looks for ‘brand and geographical fit as well as a strong local market, rather than geographical periphery’ when choosing which businesses to buy.
Speaking more generally, Nothard said that the deal was reflective of a period of ‘strategic realignment’ for the industry, as international players continue to enjoy growing influence.
He added: ‘In what could be described as a period of strategic realignment, or even “musical chairs” within the sector, we’re seeing a reshaping of partnerships, ownership structures, and market positioning.
‘Four of the top 10 dealer groups are now international, underlining the growing influence and long-term interest of global operators in the UK.
‘There is also a growing focus on acquiring digitally progressive businesses, those that demonstrate a strong understanding of evolving consumer behaviours, omnichannel retailing, and tech-enabled efficiencies.
‘Digital capability is increasingly seen as a strategic differentiator in today’s competitive landscape.
‘This trend is not only reshaping the competitive landscape but also bringing renewed focus to the types of businesses that appeal to international investors, often those with strong brand representation, cultural alignment, established leadership, regional scale, and a forward-thinking digital approach.’
How big could Lithia get?
Kendrick says that Lithia’s growing size could see it rival the likes of Arnold Clark and Sytner as the UK’s biggest dealer group.
The firm currently operates around 200 dealerships in the UK – a number which only looks set to grow with more acquisitions.
Reflecting on the group’s current standing, Kendrick said: ‘Based on the scale they have achieved in such a short space of time, conceptually they could very much end up rivalling the largest groups out there.
‘The OEMs will certainly be keeping a close eye on things as their market share continues to grow.
‘Putting Jardine and Pendragon together is a big business but a sign of the continued consolidation. I guess as Lithia continues to grow it does give opportunity for those looking to exit having a healthy well funded buyer in the market.’
