Group 1 Automotive (GPI) risk factors, FY2025 10-K

Market and Industry Risks

1. 01Availability and demand for and pricing of our products and services may be adversely impacted by economic conditions, financial developments including rising inflation, high energy prices, increasing interest rates, a potential recessionary environment and other factors39% rewritten
2. 02Existing and potential new trade policies, such as tariffs, could adversely affect our operations, costs and businessNew
3. 03Deterioration in market conditions or changes in our credit profile could adversely affect our operations and financial condition
4. 04We are subject to risks associated with our dependence on manufacturer business relationships and agreements35% rewritten
5. 05If we are unable to enter into new franchise agreements with manufacturers in connection with dealership acquisitions or maintain or renew our existing franchise agreements on favorable terms, our operations may be significantly impaired
6. 06Substantial competition in automotive sales, F&I and services could adversely impact our sales and our margins
7. 07If we are unable to acquire and successfully integrate new dealerships into our business, the growth of our revenues and earnings could be adversely affected48% rewritten
8. 08The integration process for acquisitions requires us to expand the scope of our operations and financial and other systems. Our management devotes a substantial amount of time and attention to the process of integrating the operations of acquired dealerships into our businessNew
9. 09Vehicle manufacturers may alter their distribution models43% rewritten
10. 10Vehicle technology advancements and changes in consumer vehicle ownership preferences could adversely affect our new and used vehicle sales volumes, parts and service revenues and results of operations

Operational Risks

1. 11We rely on third-party vendors and suppliers for key components of our business
2. 12A failure of any of our IT or those of our third-party service providers or a cybersecurity incident, including loss or unauthorized access of confidential information or PII about our customers or employees, could negatively affect our business, operations and financial condition
3. 13A cybersecurity breach, including loss of confidential information or a breach of PII about our customers or employees, could negatively affect operations and result in high costs
4. 14Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage
5. 15Natural disasters and adverse weather events can disrupt our business and may adversely impact our results of operations, financial condition and cash flows
6. 16Risks associated with our international operations could have a material adverse effect on our business, results of operations and financial condition
7. 17We may fail to meet analyst and investor expectations, which could cause the price of our stock to decline

Legal, Regulatory and Compliance Risks

1. 18Increased attention to sustainability matters may adversely impact our business, reputation and access to capitalNew
2. 19Changes to laws and regulations could adversely impact our operations and financial condition
3. 20We are subject to automotive and other laws and regulations, which, if we are found to have violated, may adversely affect our business and results of operations
4. 21Operational risks associated with environmental, health, and safety laws and regulations may expose us to significant costs and liabilities22% rewritten

Risks Related to Accounting Matters

1. 22The impairment of our goodwill and/or indefinite-lived intangibles could have a material adverse effect on our results of operations29% rewritten
2. 23The implementation of new SEC rules and regulations and accounting standards could require certain systems, internal processes and controls and other changes that could increase our operating costs, and result in changes to our financial statements
3. 24Our internal controls and procedures may fail or be circumvented