GROUP 1 AUTOMOTIVE INC

Except as set forth below, there have been no changes to the Risk Factors disclosed in Item 1A. Risk Factors of our 2025 Form 10-K.

We are subject to risks associated with our dependence on manufacturer business relationships and agreements.

The success of our business is dependent on vehicle manufacturers on whom we rely exclusively for our new vehicle inventory. Our ability to sell new vehicles is dependent on a vehicle manufacturer’s ability to produce and allocate to our dealerships an attractive, high quality and desirable product mix at the right time in order to satisfy customer demand.

Manufacturers generally support their franchisees by providing direct financial assistance in various areas, including, among others, incentives, floorplan assistance and advertising assistance. Certain of our OEM partners have recently announced their intention to reduce these forms of dealership financial assistance in order to improve their profitability. If our OEM partners reduce or eliminate such incentives or increase the prices of their products, it could negatively impact consumer demand for new vehicles and adversely affect our sales volumes and profitability. Additionally, a discontinuation or material change in our manufacturers’ warranty and incentive programs could adversely affect our business. Manufacturers also provide product warranties and, in some cases, service contracts to customers. Our dealerships perform warranty and service contract work for vehicles under manufacturer product warranties and service contracts, and we bill the manufacturer directly, as opposed to invoicing the customer. In addition, we rely on manufacturers for various financing programs, OEM replacement parts, training, up-to-date product design, development of advertising materials and programs and other items necessary for the success of our dealerships.

Vehicle manufacturers may be adversely impacted by economic downturns or recessions, significant declines in the sales of their new vehicles, increases in interest rates, tariffs, adverse fluctuations in currency exchange rates, declines in their credit ratings, reductions in access to capital or credit, labor strikes or similar disruptions (including within their major suppliers), supply shortages, rising raw material costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products, including due to bankruptcy, product defects, litigation, ability to keep up with technology and business model changes, poor product mix or unappealing vehicle design, governmental laws and regulations, natural disasters, including fires such as that at a major U.S. aluminum production facility in 2025, cybersecurity incidents, including incidents impacting our use of the CDK Dealership Management System, or other adverse events. In particular, all of our OEMs are investing material amounts to develop electric and autonomous vehicles. These investments could cause financial strain on our OEMs or fail to deliver attractive vehicles for customers, which could lead to adverse impacts on our business. The OEMs have been and could continue to be impacted by disruptions to the economy, lower than anticipated EV adoption, higher supply chain costs than emerging EV manufacturer competitors, delays in increasing factory production, labor negotiations, parts shortages, including semiconductor chips and other disruptions. Since 2024, a number of OEMs have announced write-offs of certain of their EV investments or scaled down electrification plans as EV demand slows, further contributing to the uncertainty of the EV market outlook and the long-term viability and profitability of OEM’s. These and other risks could materially adversely affect the financial condition of any manufacturer and impact its ability to profitably design, market, produce or distribute new vehicles, which in turn could have a material adverse effect on our business, results of operations and financial condition.

Since 2024, the majority of our manufacturers’ increased production, driving an improvement in vehicles days’ supply. Our new vehicle days’ supply of inventory was approximately 39 days as of September 30, 2026, as compared to 46 days as of December 31, 2025 and 40 days as of September 30, 2025. It is impossible to predict with certainty whether manufacturers will maintain current production levels. If our manufacturers’ production declines, diminishing our ability to meet the immediate needs of our customers, the production shortage could have a material adverse impact on our financial and operating results.

President Donald Trump issued a series of executive orders since taking office in January 2025, including executive orders regarding tariffs. Refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Events in our 2025 Form 10-K, for additional information regarding these executive orders. Many manufacturers of vehicles, parts and supplies are dependent on imported products and raw materials in their production. Any significant increase in existing tariffs on such goods and raw materials, or implementation of new tariffs, could increase production costs for OEMs that would then be passed on to consumers, potentially leading to higher vehicle prices and reduced demand, which in turn could adversely affect our profits on the vehicles we sell. Additionally, the tariffs and other market developments could potentially cause our current OEMs to lose market share to emerging EV-only OEMs. Market share losses could not only impair our sales and profits but lead to potential impairments.

In addition, certain framework agreements between the Company and its subsidiaries and vehicle manufacturers and distributors contain “change of control” provisions related to the ownership of our Common Stock or Voting Securities, which a stockholder’s acquisition of beneficial ownership in excess of certain thresholds (in some cases as low as 20%) could trigger. Pursuant to the Stockholder Agreement with Conifer (the “Stockholder Agreement”), the Company has agreed to use commercially reasonable efforts to obtain waivers or consents from the applicable counterparties in the event that Conifer’s beneficial ownership exceeded such thresholds solely as a result of certain Company transactions, including share repurchases (and not as a result of purchases by Conifer). However, there can be no assurance that such waivers or consents will be obtained or obtained on acceptable terms. The triggering of such provisions could result in the loss, termination, or renegotiation of important manufacturer franchise agreements, which could materially and adversely affect our business, results of operations and financial condition.

In addition, we may face increased competition in the markets in which we operate from vehicle manufacturers not currently represented in our dealership portfolio, including emerging Chinese automotive manufacturers. In the U.K., Chinese-branded vehicles have increased their share of new vehicle sales in recent periods, growing from approximately 8% in 2024 to approximately 13% in 2025. These manufacturers often compete aggressively on price and have expanded their offerings, including electric and hybrid vehicles, which may appeal to certain customer segments. While Chinese automotive brands currently have a limited presence in the U.S., similar competitive dynamics could develop over time. Increases in market share by new manufacturers, such as Chinese automotive brands, in either the U.K. or the U.S., could reduce demand for the vehicles we sell, increase competitive pressure on pricing and margins and adversely affect new vehicle sales volumes at our dealerships. These factors could have a material adverse effect on our business, results of operations and financial condition.

We may fail to meet analyst and investor expectations, which could cause the price of our stock to decline.

Our common stock is traded publicly, and various securities analysts follow our financial results and frequently issue reports on the Company which include information about our historical financial results as well as their estimates of our future performance. These estimates are based on their own opinions and are often different from management’s estimates or expectations of our business. If our operating results are below the estimates or expectations of public market analysts and the expectations of our investors, our stock price could decline, adversely affecting, among other things, our access to capital and investor confidence in management and those charged with governance. In addition, actions by significant stockholders, including changes in their ownership levels, required divestitures of our Common Stock, or public advocacy for changes to our strategy or governance following the expiration of standstill arrangements, could create uncertainty and adversely affect the trading price of our Common Stock.

The Stockholder Agreement with Conifer, one of our significant stockholders, contains provisions relating to Board representation, voting and share ownership that could affect the composition of our Board, our capital allocation flexibility and the market value of our Common Stock.

In September 2026, we entered into the Stockholder Agreement, pursuant to which the Company agreed, among other things, to appoint Benjamin Hart, an employee of Conifer, to the Board of Directors, and to nominate him for reelection during a specified period (the “Support Period”) so long as Conifer maintains at least 5% beneficial ownership of the Company’s outstanding Common Stock. Conifer has agreed, among other things, to customary standstill provisions through, at least, our 2029 annual meeting of stockholders. Conifer has also agreed to a cap on its beneficial ownership of 19% of our outstanding Common Stock or other securities entitled to vote in the election of directors (“Voting Securities”). During the Support Period, Conifer has further agreed to vote in accordance with the Board’s recommendations, except on certain extraordinary transactions.

A number of our framework agreements contain change-of-control provisions related to the ownership of our Common Stock. Because share repurchases by us reduce our outstanding shares, they could increase Conifer’s percentage ownership above the 19% cap. In that event, Conifer may request, no more than once per calendar year, that we seek waivers under certain of these agreements so that its higher ownership does not trigger their change-of-control provisions. We may not be able to obtain such waivers on acceptable terms, or at all, and we may need to take these thresholds into account in the timing and amount of share repurchases or other capital allocation actions. If we do not obtain the waivers, Conifer must divest the excess shares within 180 days, which could create downward pressure on the price of our Common Stock.

Our obligation to renominate Mr. Hart, and certain of Conifer’s other rights under the Stockholder Agreement, depend on Conifer beneficially owning at least 5% of our outstanding Common Stock or Voting Securities. If Conifer’s ownership falls below that threshold, Mr. Hart must tender his resignation from the Board, which could result in a change in the composition of our Board.

When the Support Period ends, the standstill restrictions will no longer apply. Following conclusion of the Support Period, Conifer’s voting obligations will continue only for shares beneficially owned in excess of 20% of our outstanding Common Stock or Voting Securities. We may also become vulnerable to stockholder activism after those provisions narrow or terminate following the Support Period. Responding to such activism could be costly and time-consuming, divert the attention of our Board and senior management, and adversely affect our business, results of operations, financial condition and the market price of our Common Stock.

We may not successfully integrate the Hennessy Acquisition or realize its anticipated benefits, and the acquisition increases our exposure to the Atlanta market.

On October 19, 2026, we completed the Hennessy Acquisition for approximately $1.3 billion. The acquisition adds 10 dealerships, representing 12 franchises and one collision center concentrated in the Greater Atlanta, Georgia market. Integrating the acquired dealerships into our operations, systems, internal controls and manufacturer relationships may be more difficult, costly or time-consuming than expected and may divert management attention. The acquired dealerships may not perform as anticipated, we may encounter unknown liabilities, and manufacturers may impose conditions on the transfer of franchises. Our increased concentration in a single metropolitan market exposes us to adverse local economic, competitive and weather conditions. Goodwill and intangible franchise rights recognized in the acquisition will be recorded at fair value with limited excess of fair value over carrying value, and any shortfall in performance could result in impairment charges. Any of these factors could adversely affect our business, results of operations and financial condition.

Our increased indebtedness could adversely affect our financial flexibility and results of operations.

In September 2026, we issued $1.25 billion aggregate principal amount of senior notes to finance the Hennessy Acquisition. As of September 30, 2026, our total debt, excluding floorplan notes payable, was $3,913.7 million, and the new notes will increase our annual interest expense by approximately $80 million. Our indebtedness could require us to dedicate a substantial portion of our cash flow to debt service, limit our ability to fund acquisitions, capital expenditures, share repurchases and dividends, increase our vulnerability to adverse economic and industry conditions, and limit our flexibility under the restrictive covenants in our indentures and Revolving Credit Facility. A failure to comply with these covenants could result in an event of default and, through cross-default provisions in certain of our mortgage agreements, the acceleration of other indebtedness.

The impairment of our goodwill and/or indefinite-lived intangibles, which could be triggered by a sustained decline in our stock price or market capitalization, could have a material adverse effect on our results of operations and stockholders’ equity.

We assess goodwill and other indefinite-lived intangibles for impairment on an annual basis, or more frequently when events or circumstances indicate that an impairment may have occurred. As of September 30, 2026, goodwill and intangible franchise rights totaled approximately $2.9 billion, representing approximately 27% of our total assets and approximately 95% of our stockholders’ equity, and this amount will increase as a result of the Hennessy Acquisition, the assets of which will be initially recorded at fair value with limited excess of fair value over carrying value. Performance issues at individual dealerships, as well as adverse retail automotive industry and economic trends, a sustained decline in the trading price of our common stock or our market capitalization, including below our book value, reductions in manufacturer incentives, tariffs, franchise terminations or dispositions and increases in interest rates or our cost of capital that increase the discount rates used in our valuations, increase the risk of an impairment charge, which could have a material adverse impact on our results of operations. During the year ended December 31, 2025, we recorded $93.0 million of goodwill impairment, primarily in our U.K. reporting unit. No goodwill impairments were recorded during the years ended December 31, 2024 and 2023. During the years ended December 31, 2025, 2024 and 2023, we recognized $91.1 million, $28.2 million and $25.1 million, respectively, of intangible franchise rights impairment. As a result of the 2025 impairment, the estimated fair value of our U.K. reporting unit has limited excess over its carrying value, and relatively small adverse changes in its projected cash flows, discount rate or market multiples could result in additional impairment. We may be required to record impairment charges if market and industry conditions deteriorate to such a level whereby the fair value of our reporting units or individual franchises is less than the respective carrying value. We cannot accurately predict the amount and timing of any additional impairment charge at this time; however, any such impairment charge, while non-cash, could have a material adverse effect on our results of operations and stockholders’ equity. Refer to Note 12. Intangible Franchise Rights and Goodwill within our Notes to Consolidated Financial Statements in our 2025 Form 10-K for further discussion of impairment.