The intersection 23-10-22 | Automotive News
|Airstream stores could be the start of a wave of diversification for Lithia Motors|
For some years, Lithium engines went on a dealer acquisition spree across the country, buying up single stores and swallowing large groups whole.
But earlier this month, the fast-growing auto retailer made an acquisition that was unlike any other: bought six Airstream stores in the Pacific Northwest from Airstream Adventures.
“[It’s a] very little business focus on what we do and no real initiative to grow this business other than to really get a sense of what some of these other mobility verticals might look like,” said Lithia CEO Bryan DeBoer on the third-quarter earnings call last week.
It’s not the only example of the company expanding beyond auto retail. Last year, after his entry into CanadaLithia bought a Harley-Davidson store in Toronto. During the company’s third quarter 2021 earnings call, DeBoer pointed out tractor-trailer mobility and agricultural mobility as areas where Lithia could layer its digital and network e-commerce strategies.
Further diversification seems likely based on DeBoer’s comments, which can be found in our story on page 1.
DeBoer reiterated its interest in other international markets and hinted that the company might consider building or acquiring customer relationship management systems or dealership management systems.
To be sure, some rival state-owned auto retailers have also ventured beyond traditional business lines.
Group 1 Automotive and Penske Automotive Group had a presence in the UK for years. think too has dealerships in Japanowns commercial truck dealerships and an interest in Penske Transportation Solutions.
AutoNation, which Lithia branded the nation’s top new-vehicle retailer in the first half of 2022, has also tried to diversify.
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 announced that it would buy indirect lender CIG Financial for $85 million and convert it into a captive finance company.
Dealer acquisitions, digital retailing and Lithia’s own captive finance unit were seen as key cogs in driving the company to achieve its ambitious five-year plan to reach $50 billion in annual revenue by 2025, nearly four times the 2019 revenue of $12.67 billion.
These aspects remain very much in play.
But it looks like DeBoer wants Lithia to be not only the biggest band, but also the most diverse.
— Jack Walsworth