Lithia Motors Inc., which last week indicated it had several acquisitions in the pipeline as it looks to continue growing, has purchased two Lexus dealerships in California.
The nation's third-largest new-vehicle retailer said Wednesday that it purchased Lexus of Sacramento and Lexus of Roseville. The stores combined are expected to generate $160 million in annual revenue. Lithia, which long term wants to more than triple its combined U.S. new- and used-vehicle market share by revenue, now has 189 stores nationally and 42 in California.
"We are excited to finally enter the Sacramento market and further expand our network with a dominant luxury-vehicle presence," Lithia CEO Bryan DeBoer said in a statement. "These stores kick off an expected strong year of growth in our core business and, combined with our digital strategies, further our vision to serve customers wherever, whenever and however they desire."
Lithia purchased the stores from RPM Luxury Auto Sales Inc. The Sacramento store opened in 1989, and RPM expanded to open Lexus of Roseville in 2003. The two stores are the only Lexus dealerships in the Sacramento metro area, and both are Elite of Lexus award winners.
Kerrigan Advisors, a sell-side company in Irvine, Calif., represented the seller in the transaction. Kerrigan Advisors in the past year has sold five Lexus stores. Erin Kerrigan, managing director of the company, said her client and others are selling stores as they age.
Kerrigan said many Lexus dealers were awarded their stores in the late 1980s or early 1990s when they were in their 40s, and now many are in their 70s or 80s.
Lithia, of Medford, Ore., ranks No. 3 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 184,601 new vehicles in 2018.