5300 Group 1 CEO Hesterberg to retire at year's end; U.S. chief Kenningham named to top post

Group 1 CEO Hesterberg to retire at year's end; U.S. chief Kenningham named to top post


Group 1 Automotive Inc., the fourth-largest U.S. auto dealership group in 2021, said CEO Earl Hesterberg will retire at the end of the year.

Hesterberg, 69, will leave Group 1 effective Dec. 31, and will be succeeded by Daryl Kenningham, the public dealership group’s president of U.S. operations since 2019, Group 1 said in a statement on Wednesday.

Kenningham, 58, has been named Group 1’s president and COO, roles that take effect immediately, and he will move into the CEO role Jan. 1.

“Now is the perfect time to transition to a new generation of leadership at our company,” Hesterberg said in a statement. “Daryl’s performance throughout his career has been exemplary, and he has driven our U.S. business to record levels. Although I will sorely miss the wonderful people at Group 1, this transition will be seamless and our Company could not be in better hands.”

17 years at Group 1

Hesterberg came to Group 1 in April 2005 from a career at automakers, including Ford Motor Co. and Nissan Motor Co. Prior to entering auto retail, Hesterberg worked as group vice president for marketing, sales and service for Ford in North America and in Europe, and also held senior-level roles at Nissan in the U.S. and Europe.
 
He was an Automotive News All-Stars honoree in 2012 and in 2020. In 2020, Hesterberg was recognized for the group’s development and rollout of AcceleRide, its digital sales platform.
 
Under Hesterberg’s leadership, Group 1 expanded internationally, first into the United Kingdom and later into Brazil. Group 1 said it now has 204 dealerships in the U.S. and United Kingdom, after completing the sale of its Brazil operations in July. Group 1 last fall said it would exit Brazil, a country it entered in 2013 with the acquisition of UAB Motors Participacoes.
 
At the time of the purchase, Group 1 said the Brazil dealerships were expected to generate roughly $650 million in estimated annual revenue. But executives have said it was difficult to scale the Brazilian business, citing in part a challenging exchange rate. At the end of 2021, Group 1 said the 16 dealerships representing BMW, Honda, Land Rover and Toyota generated roughly $315.1 million in annual revenue.
 
In the United Kingdom, meanwhile, “we have a great group of brands and stores,” Kenningham told Automotive News in an interview Wednesday. “When you look at our footprint, we’re mainly in southern England, and I believe that we will have opportunities to grow beyond that in the U.K.”
 
Kenningham said Group 1 also intends to continue to expand its dealership footprint through acquisitions in the U.S.
 
Group 1 did not make Hesterberg available for an interview Wednesday.

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Kenningham to take over as CEO
 
Kenningham joined Group 1 in 2011, initially holding the role of regional vice president before taking on additional roles. Before Group 1, Kenningham worked as COO of Ascent Automotive, a Houston-based dealership group, and spent 13 years at Gulf States Toyota, an independent distributor. He has a bachelor’s degree from the University of Michigan and a master of business administration degree from the University of Florida.
 
“I’ve had a variety of different roles at Group 1, and part of that was to try to prepare me for this new role in January,” Kenningham said.
 
“The company’s in really great shape. I think it’s in a terrific position to do well,” Kenningham said, adding that the industry — and customers’ expectations — are changing. “It’s a digital world, it’s a more diverse world. It’s a more open, transparent world, and we have to be able to be successful there. I think those are the things that we’ll continue to focus on.”
 
Stephens Inc. analyst Daniel Imbro told Automotive News on Wednesday that Hesterberg was “instrumental” in Group 1’s growth.
 
“It feels like a well-deserved retirement,” Imbro said. “I think Daryl, being in leadership for the last number of years and obviously taking over the COO role today, will be very equipped to handle that transition. I feel like there’ll be a good continuity of strategy. Daryl has been involved for a while in that strategic vision for the company. And so I think it’ll be a smooth transition.
 
“The company is getting put into good hands and I expect continued growth and good execution out of that management team,” Imbro added. “I think Earl did a great job helping grow this business and I think Daryl is the right man to lead into the next kind of growth phase.”
 
In a regulatory filing Wednesday, Group 1 said Kenningham will receive a new base salary of $1.1 million annually beginning Aug. 24. No changes are expected to Hesterberg’s compensation, the filing said.
 
Group 1 said in a regulatory filing in April that Hesterberg earned a base salary of $1.24 million in 2021, which increased to $1.27 million in 2022.

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Group 1 shares were flat at $186.46 in Wednesday afternoon trading.

Houston-based Group 1 ranked No. 4 on Automotive News‘ most recent list of the top 150 dealership groups based in the U.S. with retail sales of 146,072 new vehicles in 2021.

Jack Walsworth contributed to this report.

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