Group 1 Automotive has confirmed plans to close additional UK dealerships and cut more jobs throughout 2026, despite reporting record revenues of £16.7 billion for 2025. The American Fortune 250 automotive retailer, which operates 254 showrooms across the US and UK, announced it expects to take "additional actions in 2026" to further optimise operations and reduce costs. The company's UK-wide restructuring plan includes "further workforce realignment and strategic closings of certain facilities," marking a continuation of significant changes that began in 2025.
The announcement comes as Group 1 booked £22.5 million in UK restructuring charges for the full year 2025, with £6.4 million recorded in the fourth quarter alone. Despite revenues rising 13.2% year-on-year, profitability fell sharply compared with 2024. Full-year net income from continuing operations dropped to £255.7 million, down from £360 million the previous year, with results impacted by £103.5 million of non-cash asset impairment charges.
During 2025, Group 1 closed BMW and Mini showrooms in Stansted and Hindhead, and confirmed it would be shutting all of its Jaguar Land Rover sites over the next two years. Only last month, the company announced it would axe one of its VW service centres and a Toyota showroom in Burton. The ongoing closures represent a significant shift in strategy for a company that only recently doubled its UK footprint through the £346 million acquisition of Inchcape Retail's 54 dealerships in August 2024.
JLR Exit Highlights Mounting Pressure on UK Automotive Retail
The decision to exit all ten Jaguar Land Rover franchise operations by 2027 represents one of the most significant aspects of Group 1's UK restructuring. Mark Raban, Group 1's UK CEO, told staff in an internal memo that the move aims to ensure the company's portfolio and operations are "aligned with long-term growth ambitions." However, he emphasised this decision is "not a reflection on the brand itself, but rather a strategic move to ensure we are focusing on the right areas for growth and productivity."
The JLR exit comes amid major challenges for the luxury carmaker, including a devastating cyberattack in August 2025 that shut all JLR factories for nearly six weeks. The incident cost the UK economy an estimated £2 billion and left dealerships unable to register vehicles on September's new plate day. JLR sales volumes have dropped significantly, with wholesales down 24.2% year-over-year and retail sales declining 17.1% in recent quarters.
Patrick McGillycuddy, Managing Director of JLR UK, responded that the company remains "committed to ensuring continuity of service for our clients and representation of our four iconic brands." JLR is actively working with Group 1 to explore opportunities for the high-potential locations and support a smooth transition, suggesting replacement dealers will be sought to maintain the brand's UK presence. Group 1 currently operates JLR sites in ten locations including Guildford, North West London, Watford, Sidcup, Southend, Derby, Kings Lynn, Norwich, Chester and Preston.
Economic Headwinds and Electric Vehicle Pressures Squeeze Dealer Margins
Daryl Kenningham, Group 1's President and CEO, acknowledged that "the UK market remains challenging, with softer industry volumes and continued BEV-related margin pressure." The company is taking steps to strengthen its UK portfolio through ongoing restructuring efforts to make the business more efficient. Despite achieving record revenues across all major business lines and record gross profits in parts and service, the UK operation faces persistent economic headwinds including stubborn inflation, high interest rates, rising energy costs and weakening consumer demand.
The Zero Emission Vehicle (ZEV) Mandate has created additional pressure on dealerships, requiring 22% of new car sales in 2024 to be electric, rising progressively to 80% by 2030 and 100% by 2035. Many manufacturers struggle to meet these targets while maintaining profitability, as electric vehicles often carry lower margins than traditional combustion engine vehicles. The mandate forces difficult decisions about inventory management and sales strategies, with some manufacturers potentially restricting ICE model sales to avoid hefty penalties.
Rising interest rates have compounded dealership financial strain by increasing floor plan expenses – the interest paid on inventory financing. With tight margins already prevalent in automotive retail, these elevated borrowing costs erode profits from each sale. Dealerships operating on slim margins face heightened pressure as higher floor plan expenses consume an increasing share of revenue, potentially forcing price increases that deter price-sensitive customers.
Industry-Wide Consolidation Reshapes UK Dealer Network Landscape
Group 1's closures form part of a broader trend affecting the entire UK automotive retail sector. Evans Halshaw recently ditched two Ford showrooms in Kirkintilloch and Batley as part of changes to the Blue Oval's wider UK dealer network, with its American owners Lithia putting staff across UK businesses at risk of redundancy. Ford itself has terminated 50 dealerships under plans set out to nearly halve its dealer network, reducing from over 400 sites in 2020 to just over 200 dealers currently.
Marshall Motor Group axed six sites in March 2025 alone, while multiple closures of former Pendragon sites followed after the group's UK dealer network was acquired by Lithia. Industry analysts point to three primary drivers behind the closures: recently acquired businesses being examined with underperforming or duplicate locations closed, poor market conditions in the private new car market worsened by the ZEV Mandate, and upcoming employment cost increases from higher national living wage and employer's national insurance contributions.
Strategic Repositioning Aims to Emerge Stronger as Market Stabilises
Despite the closures and job losses, Group 1 maintains that its restructuring does not signal a reduction in its brand portfolio. Raban told employees the company remains "focused on identifying new opportunities for strategic growth in the UK over the long term." The group has expanded into new territories including the Midlands, North West England and Wales through its Inchcape acquisition, adding manufacturers such as Audi, Mercedes-Benz, Lexus, Porsche and Volkswagen to its portfolio.
Kenningham emphasised that leveraging aftersales and finance and insurance (F&I) as growth levers will position the company to emerge stronger as the market stabilises. Parts and service gross profit rose 6.3% in the fourth quarter to £285.4 million, while F&I revenues increased 1.9% to £166.3 million, demonstrating resilience in key areas that generate over 40% of total gross profit despite representing only 13% of revenue. This diversified business model provides stability against the cyclical nature of vehicle sales.
The company's strategic approach includes portfolio optimisation through mergers and acquisitions, having acquired £6.3 billion in revenues since the beginning of 2021. Group 1 has also repurchased approximately 5.8 million shares during this period, representing 32% of its share count, demonstrating confidence in long-term value creation despite short-term UK market challenges. With its diversified geographic footprint across 144 US dealerships and 116 UK sites, plus a balanced mix of import, luxury and domestic brands, Group 1 believes it is well-positioned to navigate potential challenges while capitalising on growth opportunities.
Sources:
- Car Dealer Magazine - Group 1 to axe more UK jobs
- Car Dealer Magazine - Group 1 to ditch JLR franchises
- TS2 Space - Group 1 Automotive Ditches Jaguar Land Rover
- Car Dealer Magazine - Evans Halshaw closures
- Car Dealer Magazine - Ford terminates 50 dealerships
- Car Dealer Magazine - Why dealerships are closing
- Group 1 Automotive - Inchcape acquisition
- Investing.com - Group 1 Q1 2025 results
- Autocar - Biggest challenges facing automotive retail
- Dealers Link - Rising interest rates and dealership strain