There's been a lot going on in auto retail, as you'll see in this week's Automotive News.
Bryan DeBoer's ambitious growth plans for Lithia Motors Inc. have the company, based in Medford, Ore., (pop. 86,000) finding its way to London (pop. 9 million) about 5,1000 miles away. That's a long road trip!
Last week's purchase of Jardine Motors Group, Jack Walsworth and Julie Walker report, adds more than 40 new-vehicle dealerships in the U.K. to Lithia's portfolio, including stores selling luxury brands Aston Martin, Porsche, Mercedes-Benz and BMW. And by entering the U.K., Lithia gains direct exposure to the agency model of retail, in which each brand’s dealers sell new vehicles at factory-set prices with a more fixed profit schedule.
It also gets Lithia more than $2 billion dollars closer to goal of $50 billion in annual revenue. In 2022, it booked $28.2 billion.
Lithia isn't the only one looking for big growth. Ford aims to dramatically grow its electric vehicle business. (OK, so does everyone else.) But Ford's approach to bringing its dealers along for the costly conversion to electrification has been more turbulent than most, as Michael Martinez loyally documents.
A group of 46 Ford dealers in North Carolina this month filed a petition challenging the program with the state's commissioner of the Division of Motor Vehicles, joining dozens of state dealer organizations that oppose the plan.
And about 1.5 percent of dealers decided to opt out of selling Ford EVs, despite the company's efforts, including easing restrictions on the less costly Certified tier.
There's no doubt that auto retail is undergoing profound changes. The Automotive News editorial board saw what Mercedes-Benz and its dealers are doing with retail experiments and said "Why not?"
We all know there's a full range of consumers out there from folks who do all their shopping and banking in person to those who want to transact completely online, even if it means paying more to do so without haggling. Like a lot of data in this chaotic COVID era, separating the temporary turbulence from the long-term trend can be challenging. But there can be little doubt that digital shopping is only going to continue and grow throughout the generational shift. If you believe that too, then shouldn't there be some rethinking of retail approaches to match it?
Are boutique shops at upscale mixed-use locations the key to Tesla's dominance of the EV market? No, but they play a role.
And any brand that wants to compete has to be able to at least try to match or one-up the luxury market's new king: Dogmatic demands on dealerships don't help anyone.
Everyone needs to be able to adapt. Find out what else is changing in the industry in this week's issue of Automotive News.
