Company: GPI
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001031203-25-000061
Chunk: 90

Company: GROUP 1 AUTOMOTIVE INC
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 90
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Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and the notes thereto, as well as our 2024 Form 10-K.

Overview

We are a leading operator in the automotive retail industry. We sell or lease new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts retail and wholesale. We have operations in geographically diverse markets that extend across 17 states in the U.S. and 66 towns and cities in the U.K. As of September 30, 2025, our retail network consisted of 146 dealerships in the U.S. and 113 dealerships in the U.K.

Recent Events

The U.K. economy continues to face challenges, including persistent inflation, elevated interest rates, rising energy costs and a slowdown in consumer spending. These factors have contributed to margin compression and increased operating expenses within the automotive retail industry. These economic challenges in the U.K., coupled with the voluntary termination of certain franchise agreements, caused a triggering event for the U.K. reporting unit requiring further assessment of our goodwill and intangible franchise rights. Based on our quantitative assessment, we recorded goodwill and franchise rights intangible asset impairments of $93.0 million and $23.5 million, respectively, in the U.K. reporting unit in the Current Quarter. Refer to Note 4. Intangible Franchise Rights and Goodwill within our Notes to Condensed Consolidated Financial Statements for further information. 

We will continue to monitor the challenging macroeconomic and industry conditions in the U.K. as outlined above. Further erosion in the macroeconomic environment, additional margin compression, or increases to our operating costs in the U.K. may require us to re-assess the value of our goodwill and intangible franchise rights associated with our U.K. reporting unit, which could result in additional material impairment charges in future periods.

On October 17, 2025, President Donald Trump issued a proclamation under Section 232 imposing 25% tariffs on imported medium- and heavy-duty trucks and parts, effective November 1, 2025. The order also grants a 3.75% production credit through 2030 for vehicles and engines assembled in the U.S. The measure is expected to affect vehicle costs, sourcing and production