Lithia Motors Inc., once the smallest publicly traded dealership group before embarking on a multiyear dealership buying spree, surpassed longtime No. 1 AutoNation Inc. in new vehicles sold in 2022.

Lithia retailed 271,596 new vehicles last year, up 4.2 percent, and more than 40,000 vehicles more than AutoNation, which retailed 229,971 new vehicles, a 12 percent drop, in 2022.

Lithia retailed 68,159 new vehicles in the fourth quarter, up 5.2 percent. AutoNation also saw a fourth quarter increase with retail sales of 60,074 new vehicles, up 4.3 percent.

Lithia’s figures include a small but undisclosed number of vehicles sold in Canada, including those from a Harley-Davidson store, as well as recreational vehicles sold at RV stores in the Western U.S. that were acquired by Lithia in October.

Lithia’s toppling of AutoNation, which had held the top spot since 1997, was expected as the once-smaller Lithia continued buying up dealerships at a rate far outpacing AutoNation’s acquisitions. Lithia was ahead of AutoNation in new-vehicle sales each quarter in 2022. 

Lithia, perhaps the most prolific dealership Lithia, the most prolific dealership buyer the past few years via both single-store and large private group acquisitions, such as Michigan’s Suburban Collection in 2021, continued to buy stores in 2022, further fueling its sales growth.

AutoNation, of Fort Lauderdale, Fla., acquired 20 franchised dealerships in 2021 in two large transactions, but has since sold two of those stores. AutoNation also bought four dealerships in Colorado in late 2022.

Lithia, based in Medford, Ore., is pursuing a goal of $50 billion in annual revenue by the end of 2025 with acquisitions playing a major role.

“We have made a conscious decision to utilize the majority of our cash flows towards acquisitions rather than redistributing them primarily towards shareholders or paying down debt,” Lithia CEO Bryan DeBoer said Feb. 15 in a call with analysts after the company reported fourth-quarter earnings. “As such, we have and will continue to establish the foundation for massive competitive advantages and size.”

Lithia said it didn’t have a statement on surpassing AutoNation.

Lithia saw its new-vehicle sales lead over AutoNation widen throughout 2022. Lithia had a lead of 8,500 vehicles through the first quarter and expanded it to 19,362 vehicles at midyear. Through the third quarter, Lithia was up by 33,540 vehicles.

Both companies felt the impact of new-vehicle supply shortages in 2022 with same-store new-vehicle sales down significantly for both companies. AutoNation had reported some of the lowest new-vehicle days’ supply numbers in its peer group in 2021 and 2022.

AutoNation CEO Mike Manley on Feb. 17 described the retailer’s inventory and days’ supply as “still very, very low.”

AutoNation didn’t immediately respond to a request for comment on falling to second place.

In the past, and as recently as Jan. 20, AutoNation billed itself as “America’s largest and most admired automotive retailer.” However, in AutoNation’s two most recent press releases, including its fourth-quarter earnings release issued Feb. 17, the label was changed to just “America’s most admired automotive retailer.”

AutoNation’s run in the top spot comes to an end after a quarter century. 

AutoNation, initially known as Republic Industries Inc., had been No. 1 since 1997 for new-vehicle sales as tracked by Automotive News in its annual list of top dealership groups.

Lithia, meanwhile, worked its way up the ranking, first cracking the top 10 in 1999 in the 10th spot. Lithia long ranked the lowest of the six major public dealership groups and moved between the No. 9 and No. 8 spots between 2000 and 2014. That was the last year it held the bottom spot among the publics and also the year it started its buying binge with the purchase of DCH Auto Group. Lithia hit No. 5 in 2015, No. 4 in 2016 and No. 3 in 2018.

Lithia passed Penske Automotive Group Inc. for the No. 2 spot in 2021.

C.J. Moore and Mark Hollmer contributed to this report.