CarStore to Close 16 Sites and Cut 300 Jobs After Lithia Acquisition

CarStore, a major UK car dealership, is closing 16 sites and cutting nearly 300 jobs just months after being acquired by US firm Lithia Motors in a £250 million deal. Lithia, which bought CarStore's parent company Pendragon at the end of last year, has announced plans to close 9 CarStore sites and 7 CarStore pods this quarter as part of an initial review of the business following the takeover.

The move will result in around 250 job losses, or one in 20 staff, mostly from the closing sites. Dozens of backroom staff are also facing redundancy as Lithia looks to integrate CarStore with its other UK business, Jardine Motors. Four CarStore sites will be retained and re-franchised, while seven remaining CarStore pods will become Evans Halshaw Direct sites.

Lithia bosses stated that the company is preparing to cut roughly 250 roles across the UK, with the vast majority coming from the closure of the 16 CarStore sites. The decision was made in order to focus on the company's other two branch giants, Evans Halshaw and Stratstone.

The closures and job cuts come amid a dramatic fall in the supply of used cars, which has impacted the business. The closure of the CarStores also marks a reversal of the strategy by Trevor Finn, the former chief executive of Pendragon, who created the concept before the pandemic to capture more of the used car market.

Why this matters: The closure of CarStore sites and job losses highlight the ongoing challenges and consolidation in the UK automotive retail sector. It also reflects the impact of supply chain issues and changing market dynamics on dealership businesses.

Lithia said the move is part of an initial review across the group following its acquisition of Pendragon's dealer and fleet business, and they will be consulting with a number of colleagues around potential redundancies. The deal with Lithia, which has around 340 dealerships across North America, is expected to help Pendragon's dealer management software arm, Pinewood, unlock the North American market and aim for global expansion.

Key Takeaways

• UK car dealer CarStore to close 16 sites, cut 250 jobs after Lithia Motors acquisition.
• Closures and job losses due to falling used car supply, reversing former CEO's expansion strategy.
• Lithia to integrate CarStore with its UK brand Jardine Motors, retain 4 sites as franchises.
• Closures reflect ongoing challenges and consolidation in the UK automotive retail sector.
• Lithia's acquisition of Pendragon expected to help its dealer software arm Pinewood expand globally.