Article Excerpt:
TWST: We would like to begin with a quick sketch of Group 1's history and a picture of the main things that you are doing right now.Mr. Hesterberg: Group 1 Automotive is a little more than eight years old. It is one of six public automotive retailers in the US. We currently have 95 automobile dealerships representing around 140 different franchises across the US ranging from Boston, down through Florida, across the South Central US. We are particularly strong in Texas and Oklahoma and out into Southern California, up to Sacramento, California. Our annual revenues are about $6 billion and we are quite strong in the Toyota, Lexus, and Scion brands. They represent currently about 34% of our annual $6 billion in revenues. Obviously, the company has grown steadily toward the current $6 billion level over the last eight years. We are also fairly large in Ford Motor Company brands; about 17% of our revenues come from Ford, Lincoln, Mercury, Mazda, Volvo, and so forth. We have matured over the last couple of years, as we have gone from a very decentralized operation, run in about 15 different field locations, to a structure that I implemented late last year. I have been the CEO of the company for about 14 months, and we now operate with five regional Vice Presidents. And the intention there is to standardize and commonize a lot more of our operating processes and to really start to leverage the size of the company. At $6 billion in annual revenue, we are starting to be a fairly significant sized company.
TWST: Would you tell us what your criteria for acquisitions have been?
Mr. Hesterberg: We look at it strictly on a return on investment basis.
I should also mention that because growth is important to companies like
ourselves, our focus has been on import and luxury brands. Imported
brands are big brands like Toyota, Honda, Nissan, and luxury brands are
BMW, Mercedes, Acura, Lexus, and so forth. So we are concentrating on
those types of growth brands. But it is very much a financial matter
with our target to be at 20% return on investment. That is our goal when
we size up an acquisition.
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