While Lithia has closed on some of the industry's largest acquisition deals in recent years, purchasing foreign dealerships poses different challenges.
Canada has few large groups for Lithia to acquire, and most large retailers in major markets are looking to expand themselves, said Farid Ahmad, CEO of Dealer Solutions Mergers and Acquisitions, based in Toronto.
He said Lithia's best bet would be to purchase one of those groups to act as an anchor, much like it did with its move into the Michigan market with the purchase of the 34-store Suburban Collection in April, and then work to make smaller deals over time.
"They would have to go after one of these sizable groups and pay a lot of money to get that scale," said Ahmad, who noted that he has introduced Lithia executives to Canadian dealership group leaders in recent years.
DeBoer addressed such a strategy back in 2018.
"It wouldn't change our return expectations by moving to something that's more risky, because it is more risky to move international when you're not there," he said then.
"We need to find a partner that has enough space to leverage their people and the culture they know about that country, to be able to grow from."
Still, the landscape for consolidation by a public group is sparser in Canada than in the U.S.
Canada has a much smaller population, roughly that of California — a state where Lithia has 47 dealerships, according to its website. Canada's vehicle volume also is a fraction of the sales in the U.S. New light-vehicle sales were 1.8 million in Canada in 2020 compared with 14.6 million in the U.S., according to the Automotive News Research & Data Center.