Lithia Motors Inc.’s revenue reached a record in the fourth quarter, bolstered by increased new- and used-vehicle sales, higher average vehicle selling prices and a rising gross profit per vehicle.
Lithia’s new- and used-vehicle sales rose 34 percent in the fourth quarter and climbed 51 percent for the year as the fast-growing retailer continued its brisk dealership acquisition pace and rollout of Driveway, its omnichannel retailing tool.
The average gross profit per unit on new vehicles more than doubled to $6,153 in the fourth quarter. Lithia also saw higher average gross profit per unit for used vehicles and finance and insurance.
Lithia remained an active player in the dealership buy-sell market in the fourth quarter, with multiple acquisitions in Florida and Michigan. Lithia also acquired its first motorcycle dealership when it bought Pfaff Harley-Davidson of Toronto.
Lithia’s fourth-quarter acquisitions combined are expected to generate annual revenue of $700 million, the company noted.
Lithia sold four dealerships in the quarter. In October, it sold Carbone Nissan in Yorkville, N.Y., to Steet Ponte Auto Group. Later that month, Lithia sold Carbone Chevrolet in Yorkville and Carbone Buick-GMC of Utica, also in New York, to Brickl Cos. It then sold Carbone Honda Yorkville to Brickl in November.
On Jan. 30, Lithia made its first dealership acquisition of 2022 when it bought three dealerships in Northern California, which the company noted will add an expected $700 million to its annual revenue. Lithia also closed a BMW store in New York. It now has 280 dealerships across the U.S. and Canada.
In July 2020, the Medford, Ore., retailer revealed an ambitious five-year plan to reach $50 billion in annual revenue by 2025 — nearly quadruple 2019’s revenue of $12.67 billion.
“Since the launch of our 2025 Plan 18 months ago, we have acquired over $11 billion in annualized revenue,” Lithia CEO Bryan DeBoer said in a statement. “Increasing our network fuels Driveway’s growth, our overall size and scale and ability to further expand our competitive advantages in used vehicle procurement, reconditioning and logistics. [Lithia’s] reputation in the marketplace and the magnitude of the deal pipeline makes us confident in our ability to strategically expand our network while meeting our disciplined return thresholds.”
Lithia shares closed up 3.8 percent on Tuesday to $298.76.
Q4 revenue: $6.3 billion, up 60 percent from a year earlier
Q4 net income: $291 million, up 55 percent from a year earlier
Q4 adjusted income: $348 million, up 138 percent from a year earlier
Vehicle sales: Lithia sold 134,726 vehicles, new and used, in the fourth quarter, up 34 percent. On a same-store basis, the group sold 89,841 new and used vehicles in the quarter, down 5.5 percent. For the full year, Lithia sold 536,233 new and used vehicles, up 51 percent.
2021 revenue: $22.8 billion, up 74 percent from a year earlier
2021 net income: $1.1 billion, up 125 percent from a year earlier
2021 adjusted income: $1.2 billion, up 166 percent from a year earlier
Records: Fourth-quarter and full-year revenue
Ranking: Lithia ranks No. 3 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 171,168 new vehicles in 2020. Its April acquisition of Suburban Collection makes Lithia the second-largest group going forward.