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AHG adds Mercedes dealerships to stable

Shining: The network of Australia’s biggest vehicle retailer, AHG, increases to 104 dealerships and 179 franchise outlets with the purchase of three Mercedes dealerships in Perth.

Purchase of three Mercedes-Benz dealerships in WA puts AHG deeper into luxury sector

7 Jul 2015

AUTOMOTIVE Holdings Group (AHG) has this week purchased three Mercedes-Benz dealerships in Perth, marking a further move into the luxury car sector for Australia’s largest automotive retailer.

The dealerships were sold for $58 million by Western Pacific Automotive (WPA), a private group headed by well-known WA businessman Ian Goldie.

It is AHG’s first exposure to Mercedes-Benz passenger cars and only the national group’s third luxury franchise. It also operates Chellingworth Porsche and Bentley in Perth’s upmarket Nedlands suburb.

The deal comes just two weeks after AHG opened a $30 million truck dealership for Daimler Truck products, including Mercedes-Benz, Fuso and Freightliner. It also has three Daimler Truck outlets at Brisbane, Gold Coast and Newcastle.

The three new Mercedes-Benz dealerships are Diesel Motors in the Perth south-eastern suburb of Bentley, Westpoint Star in the northern corridor at Osborne Park and Southpoint Star in the southern coastal town of Mandurah.

The sale includes a dedicated autobody repair business in the Perth north-eastern suburb of Bassendean.

Nationally, AHG now has 104 dealerships, and because many have more than one vehicle brand, it now has 179 franchise outlets.

Mr Goldie, who has been associated with the Mercedes–Benz dealerships since 1981, said he expected the change of ownership to represent a smooth transition for his staff.

“AHG has agreed to retain the existing staff, including the management teams led by Jason Novatsis, so that the operating structure will remain largely unchanged,” he said.

Mr Goldie has had a long association with AHG dating back to its early growth under Vern Wheatley and Bob Branchi.

AHG managing director Bronte Howson said the transaction involved a total of about $58 million for WPA’s assets and goodwill.

He said it would be funded within AHG’s existing capacity and is expected to immediately contribute to earnings.

In February, AHG posted its six-monthly accounts to December 31, 2014, showing a net profit of $45 million, up 17.4 per cent on the previous corresponding period. Revenue for the six months was $2.57 billion, up 10.6 per cent on the previous period.

“We are delighted to include the Mercedes–Benz passenger brand in our portfolio,” said Mr Howson.

“The growth of the luxury car segment has outpaced many mainstream brands and these three dealerships are extremely well-run, high-profile businesses with a level of exclusivity in an important sector of the market in Western Australia.

“The timing is perfect for us with Mercedes–Benz clearly the market leader in the prestige sector in Australia and entering a new product cycle with an outstanding range of vehicles across the compact, passenger, SUV and limousine categories.” Mercedes-Benz light-vehicle sales this year to June 30 are up 19.2 per cent, against a total market increase of 3.3 per cent. In WA, the car market year-to-date is down 8.4 per cent, trimmed by a decline in the mining industry.

Mr Howson said the purchase, subject to due diligence and conditions including approval by Mercedes–Benz Australia/Pacific, is expected to be completed by late September.

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