Lithia goal: Add dealerships, boost revenue
Group to separate more dualed stores
Lithia CFO Chris Holzshu: A stand-alone store “has a lot more opportunity and focus in most of our markets.”
ORLANDO -- Lithia Motors Inc. says it will grow in size and revenue this year.
The dealership group expects to increase new-vehicle sales at each store, drive down costs by controlling payroll and ad spending, buy more dealerships and separate more dualed stores into stand-alone facilities, Lithia CFO Chris Holzshu said in an interview at the National Automobile Dealers Association convention here.
"We realized the stand-alone dealership has a lot more opportunity and focus in most of our markets when it wasn't dualed with another store," Holzshu said.
In Spokane, Wash., Lithia separated its Camp BMW-Subaru dealership into two stand-alone stores early last year. The Subaru store's 2012 new-vehicle sales rose about 70 percent and Camp BMW's rose about 50 percent from 2011, Holzshu said.
Lithia will separate one to two more dualed stores over the next year or so, he said.
Lithia expects each of its 87 dealerships to increase new-vehicle sales 5 percent above the local market growth in 2013, Holzshu said.
The stores will focus on improving sales of new and used vehicles and finance and insurance products, he said.
The company has about $250 million to spend on acquisitions this year, Holzshu said. Lithia plans to buy stores of all brands. In smaller markets the group concentrates on brands of Toyota Motor Sales U.S.A., Ford Motor Co., Chrysler Group and General Motors, Holzshu said.
"We're basically looking to move our footprint throughout the United States," Holzshu said. "Our focus is to maintain the exclusive franchise in the markets that we're in."
When Lithia acquires a store, the group keeps the dealer in place to run it while "we provide the capital and the opportunity to grow the business," Holzshu said.
Lithia spent $66 million in 2012 on store improvements and new facilities, Holzshu said. This year Lithia has budgeted about $25 million for capital expenditures.
Lithia will report its fourth quarter and 2012 results on Wednesday, Feb. 20.
Lithia, of Medford, Ore., ranks No. 9 on the Automotive News list of the top 125 dealership groups in the United States with retail sales of 44,537 new vehicles in 2011.
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