Beyond New Cars: How Service and Financing Drove Group 1 Automotive to Record $22.6B Revenue in 2025
This analysis is based on the original reporting from WardsAuto. For continuous industry updates, subscribe to the free daily WardsAuto newsletter.
HOUSTON – In a year where new-car profitability faced significant headwinds, Group 1 Automotive (NYSE: GPI) has steered to a historic financial finish. The automotive retail giant announced full-year 2025 revenues surged 13.2% to a record $22.6 billion, defying broader market pressures.
The engine of this growth wasn't the showroom, but the service bay and the finance office. The company's Fixed Operations (Parts & Service) and Finance & Insurance (F&I) divisions delivered standout performances, providing a critical buffer against margin compression in new vehicle sales.
"Our strategic focus on operational excellence in our service departments is paying tangible dividends," said Daryl Kenningham, President and CEO of Group 1, during the year-end earnings call. He highlighted a notable 10-percentage-point reduction in technician turnover, a key metric in the industry's ongoing labor crunch. While not disclosing the exact rate, Kenningham pointed to concrete quality-of-life investments—like air-conditioning all U.S. service bays—as a factor in retaining skilled staff.
The numbers tell a compelling story of strategic pivot. For the full year, U.S. parts and service revenue climbed 7.1% to $2.1 billion on a same-store basis. More telling is the composition of that work: higher-margin customer-pay and warranty service volumes grew by 5% and 11% year-over-year in Q4, respectively, while lower-margin collision repair work was deliberately scaled back by 17%.
"Parts and service continue to be a differentiator for Group 1, providing both growth and stability," Kenningham asserted.
This performance offset a challenging landscape for new vehicles. The average gross profit per new vehicle sold in the U.S. fell 7.9% for the year to $3,371. For 2026, leadership expects further gains in Fixed Ops and F&I, alongside a push to grow its used-vehicle business.
Industry Context & Analysis: Group 1's results underscore a fundamental shift in automotive retail. As new-car margins become increasingly volatile, publicly traded dealer groups are leveraging their large, captive service footprints to build more predictable, recurring revenue streams. The successful retention and improved productivity of technicians—a segment plagued by shortages—is not just an operational win but a direct competitive advantage that supports customer retention and dealership valuation.
Reader Reactions:
"Finally, a dealer group talking sense. The real value isn't in the one-time sale anymore; it's in owning the customer relationship for the next ten years through service and financing. Group 1 gets it." – Michael Torres, Auto Industry Consultant, Atlanta.
"These record revenues are a smokescreen. They're cutting collision repair—a essential service for accident victims—to chase fatter margins elsewhere. This is what happens when Wall Street runs car dealerships: convenience for shareholders over community service." – Sarah Chen, former body shop manager & consumer advocate, Denver.
"The 10-point drop in technician turnover is the headline for me. In this market, keeping your techs is like finding gold. That AC initiative is a simple, brilliant move that shows they understand what actually motivates their workforce." – David Riggs, host of "The Shop Floor" podcast.