ORLANDO -- Sid DeBoer, 64, is CEO of Lithia Motors Inc., a publicly traded group of 86 auto dealerships in 12 states. This month Lithia made a preliminary estimate of 2009 sales totaling $1.8 billion to $1.85 billion. The earnings are scheduled to be released Wednesday, Feb. 24.
DeBoer spoke with Staff Reporter Lindsay Chappell during J.D. Power's International Automotive Roundtable here just before the National Automobile Dealers' convention.
Are you thinking about new opportunities for Lithia?
Of course. That's what I do.
What franchises would you be interested in acquiring now, or which ones will you avoid?
I'm not going to say which ones I don't want. But I'll tell you what interests me. I like Toyota, Honda, Chevrolet. And for the markets that we're in, which are mostly smaller markets, I like GMC and Buick. I like Ford -- and I mean the Ford brand. Luxury doesn't matter much for some of our markets, but we have BMW. We have Chrysler and we're hanging in there with them. I think they're going to come back.
We're also big on Subaru because we have some markets in places like Alaska, where they get a lot of snow. And Subaru is also big on us, which is important to me.
Why do you say that?
Because I want a manufacturer that wants to work with us. I'll give a manufacturer what they want, but it's a partnership and I want a partner that likes doing business with us.
Are you willing to invest in big dealerships these days?
Yes. We have a $40 million BMW store in downtown Seattle, and it's one of our top stores.
Is it profitable?
It's only been open a few months, but yes, it is profitable.
What's your forecast for the year?
We stopped making forecasts about two years ago. I've been saying I don't see a lot of change this year. But dealers have hunkered down for a 9 million-unit industry, and they'll make money at this level. As the market comes back, everyone will start to make a lot of money. I think people are keeping their inventories lower, and factories have stopped pushing cars on us. It's now demand-driven at every manufacturer we have, bar none.
How far would you like to see inventories reduced?
A good goal would be half, but that's not going to happen. Our grosses go up when we get low on inventory. We can operate like this. So I don't really need to know what's going to happen long range. I just need to know what's 90 days out so I can start ordering inventory again.