Lithia continues expansion with Calif., Texas acquisitions

Lithia Motors Inc. is continuing its expansion and has added a large-volume Honda store in Southern California and two import dealerships near Dallas.

The second-largest dealership group in the U.S. on Monday bought Rock Honda in Fontana, Calif., from Bill Piercey and Tom Chadwell. Piercey and Chadwell still own five dealerships across Arizona, California and Colorado.

The store, which Lithia said was Honda's 16th largest in the country based on new-vehicle volume in 2020, will add an expected $170 million in annual revenue. The dealership has been renamed Honda of Fontana.
Lithia noted that the dealership is licensed to "provide customers with personal insurance."

"We are excited to reach more consumers in the Southwest region and welcome the Rock Honda team to the Lithia & Driveway family," said Lithia CEO Bryan DeBoer in a statement. "This high-performing, customer-focused store expands our omnichannel network and introduces a new adjacency with personal insurance products, further complementing our ability to provide consumers transportation solutions wherever, whenever and however they desire."

Omnichannel is digital shopping technology that provides a seamless buying experience for consumers regardless of device or whether they shop online, in-store or both.

Bill Scrivner of Pinnacle Mergers & Acquisitions in Frisco, Texas, represented Lithia in the Rock Honda transaction.

Texas deals
Lithia on Aug. 9 bought Kia of Frisco from Zohreh Malek. The store had recently opened, Lithia said. A spokeswoman for Lithia said it did not use a broker in that transaction.

In June, Lithia purchased five Southwest Auto Group Kia stores.
Lithia also teamed up with former NFL linebacker Jessie Armstead to open Grapevine Honda in Texas. The open-point dealership had been under construction since May 2020 and opened July 16, Lithia said. An "open point" refers to a location an automaker has identified for opening a store.

Lithia said it now has 32 stores in Texas.

"Our track record of high performance underpins our relationships with our manufacturer partners, and we appreciate their continued trust in our ability to meet customer needs and grow market share," DeBoer said in a statement announcing the Kia of Frisco transaction.

Armstead, a former New York Giants star, owns 51 percent of Grapevine Honda, while Lithia owns 49 percent, a Lithia spokeswoman said. Armstead initially had partnered for the store with Michael Saporito — a partner of his in other dealerships at the time. It wasn't clear what happened to that arrangement.

Armstead declined to comment through a spokeswoman.

Lithia already had a relationship with Armstead and an ailing auto group he was associated with, as it in 2019 bought Hamilton Honda in New Jersey and Hazleton Honda in Hazle Township, Pa., though in May it sold the Pennsylvania store.

The Grapevine Honda store, which was slated to be a 100,000-square-foot-plus dealership, was the subject of protests with the state of Texas by four other dealerships in 2017. The dealerships argued that the market area was adequately represented.

Lithia, of Medford, Ore., ranked No. 3 on Automotive News' most recent list of the top 150 dealership groups based in the U.S., retailing 171,168 new vehicles in 2020. But its April acquisition of Michigan's Suburban Collection makes Lithia the second-largest group going forward.