06/03/2007 - 22:00

AHG listing changes auto dynamics

06/03/2007 - 22:00


Save articles for future reference.

The automotive trade has traditionally been the exclusive preserve of private companies but that changed dramatically 16 months ago when Perth’s biggest car dealer listed on the stock exchange.

AHG listing changes auto dynamics

The automotive trade has traditionally been the exclusive preserve of private companies but that changed dramatically 16 months ago when Perth’s biggest car dealer listed on the stock exchange.

Automotive Holdings Group has grown rapidly since listing in 2005 – it has 27 locations and 44 vehicle franchises and its operations are equally split between Western Australia and other markets.

With group turnover approaching $2 billion, AHG makes a potent competitor for the private companies that make up the rest of the industry in WA.

Its automotive business in WA generated sales of $732 million in the half-year to December 2006, after taking out the contribution from its logistics arm ($122 million) and its NSW ($40 million) and New Zealand ($41 million) acquisitions, which were completed late last year.

Managing director Bronte Howson is keen to pursue growth in other states, and he believes there is also room for AHG to expand in Perth, noting that the group does not yet have Mazda or Honda dealerships.

AHG will be opening a new Mitsubishi dealership in Rockingham shortly and plans to build more facilities in Perth’s north. 

Other big players in the Perth market include Stan Perron’s Prestige Motors, which is the only independent business globally to hold a direct franchise from Toyota Motors in Japan.

It accounts for more than 20 per cent of the market and generated annual sales last year of $441 million.

John Hughes is one of the best-known faces in the Perth auto trade and his group is also one of the biggest player.

John Hughes Group has generated annual sales of just over $300 million from his Mitsubishi, Hyundai and Volkswagen dealerships in Victoria Park.

Following the purchase last year of Park Ford in Bentley, Mr Hughes is aiming to lift group turnover to $350 million.

The Park Ford acquisition marked his return to the Ford market, following his sale of Titan Ford into the Perth Auto Alliance in 1999.

The alliance was disbanded last year, when AHG bought three Ford dealerships and the others were sold.

If Mr Hughes was able to lift annual sales to $350 million, that would give his group the same turnover as the Barbagallo Group, which specialises in luxury and high-performance cars and luxury boats.

It has annual sales of $350 million, according to its company web site, but does not provide a breakdown of the figure.

Another big competitor in the Perth market is the Di Virgilio family’s DVG Automotive Group, which operates dealerships in five locations across Perth.

Managing director Lou Di Virgilio told WA Business News the group was aiming to lift sales by 20 per cent this year to $300 million.

Brian Gardner is one of the best known brands in the Perth auto market but is a lot smaller than some of its competitors.

Brian Gardner Motors Pty Ltd, run by the founder’s son John Gardner, generated annual sales of $144 million and a net profit of $2.3 million in the year to June 2005, according to the most recent accounts lodged with the Australian Securities and Investments Commission.

Another influential figure in the Perth auto trade, but with a very low public profile, is Bob Allen, whose interests include Parkland Mazda in Cannington.

Mr Allen’s recent investments include Melville Holden, which he purchased last year in partnership with Harold Schoolland (whose interests include Wanneroo Mazda) and dealer principal Paul Davies.

The three men have teamed up again this year, finalising a deal earlier this month to purchase Metro Motors Morley.

In both deals, each of the men has a one-third stake.

Mr Allen said the term Bob Allen Group, used loosely by some people in the trade, was a misnomer because the dealerships in which he has an interest trade independently.

“There are a lot of businesses with a variety of arrangements,” he told WA Business News.

The seller of Melville Holden, Richard Bennett, continues to be a sizeable player in the auto trade through his Magic Group, which includes Magic Nissan in Melville.

AHG’s Bronte Howson said acquisition targets were usually well-established businesses with management in place but no ownership succession.

The company was also assessing new greenfields sites, and preferred to have single-franchise sites in WA.

“We believe you need to have single focus dealer principals,” Mr Howson said. “The manufacturers also like single sites, you need to work in conjunction with them.”

He noted that multi-franchise sites were more common on the east coast, where dealers would build several showrooms on one site for different brands.


Subscription Options