Do recent acquisitions signal investor confidence?

News of Mercedes-Benz Retail selling its Manchester and Birmingham businesses to Hong-Kong auto retailer Lei Shing Hong could be seen as proof that the UK auto retail sector is worth investing in. This comes despite the underperforming share prices of some PLCs in the market, financial jitters surrounding the forthcoming EU vote and the general state of the domestic economy.

And while the Mercedes deal was something of a surprise, the acquisition wasn’t an isolated one. With Wessex Garages also being snapped up by a Far East business recently – this time Japanese auto group VT Holdings – clearly there’s value in investing in UK PLC.

However, the money is from the Far East, not the EU or homegrown. It begs the question: do these investors know something we don’t? With industry in general in flux thanks in the part to issues over the forthcoming EU referendum, stagnant interest rates, a downturn in construction activities and consumer confidence, uncertainty has become the new normal. Granted, some of this depressed mood could be short term but no one knows for sure.

Still, it could be that these canny investors have decided to look past June 23 and set their sights on the long term. With projections of another strong year in terms of new car registrations and positive light commercial sales, these deals could be the start of a long and prosperous adventure.