| Airstream stores could be the start of a diversification wave for Lithia Motors |
For the last few years, Lithia Motors has been on a dealership acquisition spree across the country, buying single stores and swallowing large groups whole.
But earlier this month, the fast-growing auto retailer made an acquisition that looked different from all the others: It bought six Airstream stores in the Pacific Northwest from Airstream Adventures.
“[It’s a] very small focus for the company relative to what we’re doing and no real initiative to grow that business other than to really get a feel for what some of these other mobility verticals could look like,” said Lithia CEO Bryan DeBoer on the company’s third-quarter earnings call last week.
This is not the only example of the company stretching beyond automobile retail. Last year, following its entrance into Canada, Lithia bought a Harley-Davidson store in Toronto. On the company’s earnings call for the third quarter of 2021, DeBoer pointed to tractor-trailer mobility and farming mobility as areas where Lithia could overlay its digital e-commerce and network strategies.
Additional diversification seems likely based on comments from DeBoer, which can be found in our Page 1 story.
DeBoer reiterated interest in additional international markets and hinted that the company could look at either building or acquiring customer relationship management systems or dealership management systems.
To be sure, some rival public auto retailers have also ventured beyond traditional business lines.
Group 1 Automotive and Penske Automotive Group both had a U.K. presence for years. Penske also owns dealerships in Japan, has commercial truck dealerships and a stake in Penske Transportation Solutions.
AutoNation, which Lithia passed as the country’s top retailer of new vehicles through the first half of 2022, has also dabbled with diversification.
While AutoNation closed its unprofitable aftermarket collision parts unit in 2020, the auto retailer still has its AutoNation Precision Parts business, which sells branded maintenance and repair parts, and its AutoNation USA used-vehicle stores.
And in July, AutoNation said it will buy indirect lender CIG Financial for $85 million and convert it into a captive finance company.
Dealership acquisitions, digital retail and Lithia’s own captive finance unit were seen as key cogs for the company to achieve its ambitious five-year plan to reach $50 billion in annual revenue by 2025, nearly quadruple 2019’s revenue of $12.67 billion.
Those aspects remain very much in play.
But it appears DeBoer wants Lithia to be not only the biggest group, but the most diversified one, as well.
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In Monday’s Automotive News:
Precious metals wanted. According to a recent International Energy Agency report, if the U.S. and other nations hope to hit their targets on electric-vehicle adoption, supply chains for critical materials such as lithium and nickel will need to be built up significantly — and fast. Automotive News looks at how rising auto industry demand for those raw materials to build more BEVs and meet global carbon emission goals will mean the creation of dozens more lithium, nickel and cobalt mines.
Sleek Celestiq. The Cadillac Celestiq, the sleek, futuristic-looking five-door electric fastback sedan coming in just over a year, represents more than just a new ultraluxury offering from General Motors. Automotive News explains that while the Celestiq is the start of a new way of doing business for Cadillac, the $300,000-plus EV raises questions about what role the luxury brand’s dealer body will play in the ordering and delivering of the car.
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Midsize Hummer on its way? GM is considering adding an electric midsize pickup to its lineup of Hummer vehicles, according to people familiar with the matter. These sources say a smaller, electric Hummer is still a design concept in GM’s California studio, but that it has a good chance of going into production and is seen as a priority project.
Questions for Tesla: Tesla CEO Elon Musk says the EV maker isn’t facing demand problems despite economic headwinds, and the company expects to sell every vehicle it can produce this quarter from its factories in California, Texas, Germany and China. Tesla expects to increase production by 50 percent annually for the foreseeable future, but deliveries might fall below that number.
Last mile for Last Mile: Mullen Automotive Inc. purchased the assets of Electric Last Mile Solutions Inc., marking the end for the suburban Detroit electric-vehicle startup whose spiral started earlier this year. Brea, Calif.-based Mullen was approved by U.S. Bankruptcy Court District of Delaware to take over the company’s manufacturing plant in Mishawaka, Ind., plus its inventory and intellectual property.
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Oct. 27, 2014: As of this date, General Motors had repaired 1.27 million of 2.2 million recalled U.S. Chevrolet Cobalts, Saturn Ions and other small cars. GM dangled $25 gift cards to Starbucks, Bass Pro Shops and other retailers to persuade owners of recalled cars with faulty ignition switches to get them fixed. The ignition switch could inadvertently slip out of the run position and cut power to the steering, brakes and airbags, a defect that was linked to 30 deaths at that time.