UK logistics and property giant Stobart Group has entered the car transport market after reaching an agreement to buy finished vehicle haulier Autologic for £12.4m ($19.5m) subject to shareholder agreement and regulatory approval.

According to Stobart, in order to maximise its future potential, Autologic, also based in the UK, would benefit from Stobart’s buying power in relation to new vehicles, maintenance, tyre and parts supplies and insurance. In addition, the company’s directors have stated they believe there are opportunities for Autologic to expand further into the European market, where the Stobart Group has a growing presence.

Autologic has been making its own spate of acquisitions recently but has suffered a share decline of nearly 50% over the year to the end of May.

For its own part, Stobart said the takeover would enable it to enter the car transport and vehicle services markets “with immediate critical mass”.

It also said that it hoped to improve efficiency by reducing the amount of empty return legs on delivery routes, a long held challenge for those in the finished vehicle haulage sector.

According to Stobart’s directors the car transport sector suffers from significant levels of one-way traffic flow of cars from the main ports to dealerships, with resultant empty running on the return leg.

The company also said that it believed Autologic could benefit from the use of Stobart’s rail infrastructure in reducing these empty miles and improve operating and environmental performance as a result. Stobart believes that rail is a much under-used mode in UK car haulage.

Autologic should be able to benefit from the Stobart Group’s significant storage sites both in terms of car storage and also overnight truck parking said the company in a statement.

"Autologic is an excellent fit with our group strategy to expand into complementary service offerings and it will facilitate our entry into the auto-logistics market in a leading position,” commented Andrew Tinkler, CEO of Stobart. “We expect to be able to drive substantial synergies and efficiencies from improved fleet utilisation, vehicle buying and maintenance, which will benefit our customers and drive value for our shareholders. We also see opportunities to expand Autologic’s presence in Europe where we have a growing presence."

Autologic’s CEO, Avril Palmer-Baunack, said the deal with Stobart would strengthen its position in the market and enable it to provide flexible and innovative solutions for its customers while improving competitiveness by being part of a bigger business.

However, according to Transport Intelligence analyst Thomas Cullen, the move spells the

end of the Autologic saga. "From being probably the leading independent finished vehicle provider in Europe, to being an arm of a UK less-than-trailer load trucking company is a big fall," said Cullen. "However, it illustrates how viscious the finished vehicle logistics business can be."

One the question of Stobart's ambition to reduce empty backloads, Cullen said it is difficult to get such utilisation in the car carrying business. "After all, you can only use the trailers for moving vehicles. There might well be some synergies within Stobart but I would not exaggerate them," said Cullen.

Autologic’s Walon division had recently bought the assets of rival UK-transport company, Spirit Motortransport, after the latter was placed into administration in May. It also acquired the assets of Sensible Transport earlier this year following that company’s own insolvency and move into administration.