Inchcape wins distribution contract with Groupe PSA in Australia

FTSE 250 car dealership Inchcape has won a contract with Groupe PSA in Australia to distribute its Peugeot and Citroen brands.

Inchcape said the contract - which will become effective from June - will complement its current operations and is consistent with its Ignite strategic objective of investing to accelerate growth.

The retail network for PSA in Australia incorporates 57 sites, none of which are directly owned. Australian PSA vehicle volume in the past three years has been around 5,000 units a year, close to 10% of the volume of Inchcape's existing Australian distribution business. The PSA Australia business is expected to be broadly profit neutral in 2017 and to make a positive contribution thereafter.

Chief executive officer Stefan Bomhard said: "Inchcape is perfectly placed to leverage our increased scale in Australia with this contract win for PSA. The addition of PSA to our Australian portfolio reflects our Ignite strategy in action, working closely with OEMs to target exciting growth opportunities and building further momentum following the deals completed by the group in 2016.

"This distribution contract win adds meaningful volume to our Australian operations and I am excited about the potential to build an even stronger platform for growth, driving value creation for our shareholders and partners."