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Group 1 Automotive Inc GPI

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GM Loses U.S. Sales Crown for the First Time Since 1931; We Expect Industry Growth in 2022

Analyst Note

| David Whiston, CFA, CPA, CFE |

Most automakers, except Ford who reports on Jan. 5, reported fourth-quarter or December U.S. auto sales on Jan. 4. According to Wards, December light vehicle sales fell year over year by 25.6% and by 22.9% after adjusting for one less selling day in December 2021. The seasonally adjusted annualized selling rate of 12.44 million was far below December 2020’s 16.31 million due to 2021’s chip shortage continuing to cause woefully inadequate inventory. Wards put full-year 2021 sales at 14.93 million, up 3.1% from 2020 but still far from 17.1 million in 2019. Barring no mass pandemic shutdowns in 2022, we expect that this year sees at least about 5% growth from 2021, but the chip shortage will likely not be completely resolved until 2023. We expect gradual improvement throughout 2022, especially in the second half. We believe industry demand remains high.

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Company Profile

Business Description

Group 1 owns and operates 52 collision centers and 218 automotive dealerships across 288 franchises in the U.S., the U.K., and Brazil, offering 34 brands of automobiles altogether. U.S. locations are mostly in metropolitan areas in about 15 states in the Northeast, Southeast, Midwest, and in California. Revenue in 2020 totaled $10.9 billion. The company was founded in 1995 and is based in Houston. In November 2021, the company acquired 30 stores and three collision centers in New England from Prime, which was about the 20th largest U.S. auto dealer group and had $1.8 billion of 2020 revenue.

800 Gessner, Suite 500
Houston, TX, 77024
T +1 713 647-5700
Sector Consumer Cyclical
Industry Auto & Truck Dealerships
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 12,337