MEDFORD, Ore. — Dealership acquisitions, already a hallmark of Lithia Motors Inc.'s long-term growth strategy as it became the country's largest seller of new vehicles, will play an even bigger role in an update to its audacious plan to reach $50 billion in annual revenue by the end of 2025.
CEO Bryan DeBoer said Lithia's network development, or acquisition, target is now $25 billion in revenue, up from the previously stated $20 billion.
The change stems from Lithia pulling back on its overall revenue target for Driveway, its online sales platform, by $5 billion, DeBoer said.
"We just hit 75 percent of the way through our initial network development plan," DeBoer said in a wide-ranging interview last week at the auto retail giant's headquarters here. "And we had just reached [the] halfway point of the 2025 plan. So we thought that was an easy give."
Lithia bought 25 U.S. franchised dealerships last year, down from 67 in 2021, according to data tracked by Automotive News.
In its March proxy statement, Lithia said its 2021 acquisitions achieved a return on investment of 30 percent, ahead of its 15 percent target.
"Lithia Motors' core competency is M&A," said DeBoer, who earlier in his career was the retailer's senior vice president of mergers and acquisitions/operations.