Lithia & Driveway showed the depth and diversity of its automotive enterprise via the trio of moves the company announced on Tuesday.
The actions included the acquisition of five stores, an issuance of securities associated with its finance company and the launch of a state-of-the-art customer relationship management (CRM) and workflow platform.
The acquisition allowed Lithia & Driveway to expand its north central footprint with the purchase of five stores from the Wilde Automotive Group in Wisconsin.
According to a news release, the Wisconsin group was started by Harold Wilde in 1966 and includes Wilde Toyota, Wilde Subaru, Wilde Honda, Wilde CJDR and East Towne Honda.
Together, Lithia & Driveway said these stores are projected to generate $625 million in annualized revenue. LAD also expects to complete network optimization (divestitures) of approximately $625 million in annualized revenues in 2022.
Lithia & Driveway highlighted that the pipeline of opportunities to continue network expansion remains “robust, driving LAD to another banner year of growth.”
Lithia & Driveway president and chief executive officer Bryan DeBoer then said in the news release, “We are excited to welcome these high performing teams to our Lithia & Driveway family.
“Their continuous pursuit of excellence has earned them numerous awards including the President’s recognitions for both Honda stores and the Toyota store, as well as excellent reputations for serving their customers and communities,” he added.
Meanwhile, the company said in the same release that Driveway Finance Corp. (DFC) completed its second issuance of securities backed by its originated auto finance portfolio, raising more than $298 million of additional capital to fund growth.
“DFC continues to receive favorable pricing and credit ratings,” Lithia & Driveway vice president of finance Chuck Lietz said. “We’re confident in our ability to fund DFC using a combination of our conduit facilities and securitizations, enabling us to grow DFC in the coming years and support LAD’s achievement of more than one dollar in EPS for each billion dollars in revenue.”
The company shared that DFC originations now account for approximately 10% of LAD’s overall business and are expected to grow to 15% in the coming years.
Executives pointed out this growing income stream further diversifies LAD’s business model, expands profitability, and enhances consumer loyalty with its stores, and its national Driveway and GreenCars brands.
Finally, Driveway activated Freeway, a state-of-the-art customer relationship management (CRM) and workflow platform, empowering its care centers to serve customers more seamlessly and efficiently as they buy, finance, sell, and service their vehicles from the comfort of their homes.
“We are excited to deploy Freeway, our latest strategic platform to further fuel the growth of Driveway and omni-channel capabilities at LAD,” Lithia & Driveway chief innovation and technology officer George Hines said.
“We create competitive advantage by leveraging technology and data to anticipate the needs of our customers. Our Freeway platform empowers our Driveway Care Centers with a unified view of our customer’s journey to meet their needs most efficiently,” Hines went on to say.
Through a new project by the firm, the 2022 Pied Piper PSI Internet Lead Effectiveness (ILE) Study measured responsiveness to internet leads coming though dealership websites.
Topping the ranking among 15 national dealer groups evaluated was the Napleton Auto Group, followed by …
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A variety of dealer groups — including Sonic Automotive, Group 1 Automotive, the Lou Fusz Automotive Network, Barnes Crossing Auto Group and Ed Morse Automotive Group — have expanded their businesses in recent days.
We begin with this roundup with Sonic on Tuesday announcing the continued expansion of the EchoPark Automotive brand via the opening of its newest retail hub in Roseville, which is near Sacramento, Calif.
According to a news release, EchoPark Sacramento is the brand’s second location in the Golden State.
To date, EchoPark has 41 retail hubs and delivery centers across 21 states and is continuing its expansion toward a nationwide distribution network that is expected to reach 90% of the U.S. population by 2025.
“We look forward to bringing the best quality pre-owned vehicles and our world class guest experience to residents of the Sacramento area by delivering the EchoPark brand promise of Every Car, Happy Owner,” Sonic chief executive officer David Smith said in the news release. “Our EchoPark retail hubs and delivery centers allow us to serve the growing number of consumers who want to start their automotive shopping experience online but complete their purchase in-person at a dealership.
“The brand’s website EchoPark.com allows for any car to be sold to anyone, anywhere, while expansion of new locations allows EchoPark to be a trusted source for consumers to take delivery close to home,” Smith continued.
Group 1 acquires BMW/MINI franchises in UK
On Tuesday, Group 1 expanded its operations in the United Kingdom with the acquisition of a BMW/MINI dealership and a collision center in the town of Southend, which is located east of London in the county of Essex.
According to a news release, this location is contiguous with several other existing automotive dealerships currently owned and operated by Group 1 in the U.K and increases the company’s U.K. operations to 56 dealerships and 79 franchises.
Group 1 said this acquisition is expected to generate $80 million in annual revenue.
“We are extremely pleased to expand our BMW/MINI footprint to 20 franchises in the U.K.,” Group 1’s U.K. managing director Mark Bridgland said. “Our strong relationship with BMW and our experience in this market area make this a great addition to our group of dealerships.”
Group 1 now has 205 dealerships located in the U.S. and U.K.
Indiana Hyundai & Kia stores gain new owners
Performance Brokerage Services recently announced the sale of Duell’s Evansville Kia and Duell’s Evansville Hyundai of Indiana from Doug Duell and Amish Patel.
According to a news release, the Kia dealership was acquired by Lou Fusz Automotive Network, and the Hyundai dealership was acquired by Joe Marshall and the Barnes Crossing Auto Group.
Performance Brokerage Services highlighted the Duell’s Evansville Kia and Hyundai dealerships are located in the Division Street Auto Plaza, less than half a mile from each other. The Kia dealership had been under Duell’s ownership for more than 40 years, while the Hyundai dealership was acquired by Duell in 2011.
The Kia dealership will remain at its current location at 4000 East Division Street in Evansville and has been renamed Lou Fusz Kia Evansville.
The Hyundai dealership will remain at its current location at 4400 East Division Street in Evansville and has been renamed Hyundai of Evansville.
This transaction was exclusively facilitated by Paul Kechnie and Mark Shackelford, who are the Texas and Midwest partners of Performance Brokerage Services.
The Kia dealership marks the second of its franchise for Lou Fusz Automotive Network.
The group has been serving St. Louis and the surrounding areas since 1952 and has remained family owned and operated for the past 70 years, spanning three generations of Fusz leadership.
Today, Lou Fusz Automotive Network offers 17 brands across 13 dealerships in Missouri, Illinois and Indiana.
Randy Fusz, president and chief executive officer of Lou Fusz Automotive Network, said, “I want to thank Performance Brokerage Services for all the hard work they put forth in the completion of our buy/sell with Duell’s Evansville Kia. Specifically, the efforts by Paul Kechnie and Mark Shackelford made the process smooth, transparent, and led to the successful transition between companies.
“As you know, there are many hurdles to overcome during a buy/sell. Manufacturer applications, asset purchase agreements, property inspections, as well as daily communication between parties are all intricate parts of a successful change of ownership,” Fusz continued. “Paul and Mark provided regular updates, necessary access, and completed requests in a manner that kept the transaction private from frontline dealership employees. Handling sensitive information is vital in a buy/sell, and they did it successfully. Lou Fusz is poised for future growth, and we look forward to working together with Performance Brokerage Services on future transactions.”
The Hyundai acquisition marks the 14th franchise dealership for Barnes Crossing Auto Group.
Established in 2010, the company was formed by the Marshall and Kilpatrick families when they partnered to acquire their first dealership in Tupelo, Miss.
The group has remained family owned and operated and has expanded into Tennessee, Alabama, North Carolina, Louisiana, and Indiana. Barnes Crossing currently owns the largest Hyundai and Mazda dealerships in the state of Mississippi.
Following the sale, Duell said in the news release, “I highly recommend Performance Brokerage Services. Mark Shackelford and Paul Kechnie provided us with professional advice while listing our dealerships for sale. They got us a great deal and also ensured the transaction reached a closing. It is clear they have the connections, knowledge, and experience to create a positive transaction.”
Patel echoed his partner’s sentiments, saying, “Mark Shackelford and the team at Performance Brokerage services are remarkable at what they do. Mark kept me updated on any issues as they came up and handled several obstacles professionally and in a timely manner. Mark made the process of selling two dealerships effortless. Mark is now a dear friend of mine, and I cannot wait to see what’s ahead for us in future dealings. I am a Mark’s customer for life. I would highly recommend Mark and Performance Brokerage to anyone who is considering buying or selling a dealership. You will not regret working with Mark and will also gain a true friend along the way.”
Ed Morse gets into motorcycle business
On Tuesday, the Ed Morse Automotive Group announced acquisitions but within another segment of retailing.
The company said it has acquired Cowboy Harley-Davidson’s three locations in Texas, including the Harley-Davidson retail store located at River Walk in San Antonio.
Cowboy Harley-Davidson’s locations also include Austin and Beaumont as well as another store in San Antonio.
Ed Morse Automotive Group purchased the motorcycle dealerships from Cowboy Harley-Davidson, as George Chaconas with Performance Brokerage Services facilitated the transaction.
“We are excited to add our first motorsport franchises to our growing automotive family. I have a true passion for motorcycles and am proud to continue the growth of these locations. We look forward to making significant capital improvements and supporting the communities of Austin, Beaumont and San Antonio,” said Teddy Morse, chairman and CEO of Ed Morse Automotive Group.
“The enhancements that we will bring will be beneficial to the success of the incredible employees there, but also providing our customers a world-class motorcycle-buying experience,” Morse continued in a news release.
The Ed Morse Automotive Group is headquartered in Delray Beach, Fla., and has been family owned for more than 75 years.
According to the news release, these acquisitions will add nearly 140 employees to its over 1,800-employee base, and will grow Ed Morse Automotive Group to 34 dealerships, 69 franchises, 38 locations and 18 automotive and motorcycle brands.
In separate news releases, Performance Brokerage Services highlighted its recent involvement with other motorsports transactions.
Performance Brokerage Services announced the sale of Star City Motorsports of Lincoln, Neb., from Robert Kay to John Elway Powersports, and the sale of Platte River Harley-Davidson in Grand Island, Neb., from Robert Kay to Steve and Jeff Hinchcliff.
Performance Brokerage Services also announced the sale of Red Bluff Motorsports in California from Robert and Lori Carrel to Benny Brown and Paul Sutfin.
Sonic Automotive continued expansion of the EchoPark Automotive brand on Wednesday on its drive toward a nationwide distribution network that is expected to reach 90 percent of the U.S. population by 2025.
The newest delivery center is in Tulsa, the second largest city in Oklahoma.
According to a news release, the Tulsa delivery center is EchoPark’s first location in the state of Oklahoma and 40th location to date. It follows the recent openings of its new retail hub in St. Louis and delivery center in Columbus, Ga.
Oklahoma also broadens EchoPark’s footprint into 21 states.
“We are pleased to announce the expansion of EchoPark into Oklahoma,” Sonic chief executive officer David Smith said in the news release. “Our teammates are excited to provide residents in Tulsa and the surrounding area with a wide selection of high quality pre-owned vehicles supported by our world-class guest experience which delivers on our brand promise of ‘Every Car, Happy Owner.’ It’s not just a tagline, our mission is in our name and it’s what we do.”
Group 1 Automotive will start the new year with a new chief executive officer.
The retailer said Wednesday that president and CEO Earl Hesterberg will retire from his chief executive post and from the board of directors on Dec. 31.
Stepping into the CEO role on Jan. 1 will be Daryl Kenningham.
Kenningham, who is currently president of U.S. operations, has been immediately appointed to be company president, chief operating officer and a board member.
“On behalf of the board of directors and the Group 1 employees, we are deeply grateful for Earl’s many years of exceptional leadership and strategic vision,” Group 1 board chairman Steve Quinn said in a news release.
“As a highly respected international automotive executive, Earl utilized his relationships to expand the company's U.S. operations and build a significant U.K. business, increasing aggregate company revenues threefold. His passion for our core values — integrity, transparency, professionalism, teamwork and respect — promotes an invigorating workplace for our associates and drives our commitment to excellent customer service,” Quinn said.
Regarding Kenningham’s promotion, Quinn said: “The board and I are delighted to announce Daryl as Group 1's next CEO. Over the course of his career, Daryl has developed strong relationships with the automotive manufacturers.
“He is a proven, strategic operating executive with extensive automotive experience and a deep knowledge of Group 1. His business acumen and experience in the implementation of applied technology are what we need in this fast changing, dynamic marketplace. He has placed great emphasis on all aspects of ESG, and in particular has become a champion in the area of diversity, equity and inclusion.”
Hesterberg has been with Group 1 since April 2005. He previously worked with OEMs for 30 years, including time with Ford and Nissan.
“Now is the perfect time to transition to a new generation of leadership at our company,” Hesterberg said. “Daryl's performance throughout his career has been exemplary, and he has driven our U.S. business to record levels. Although I will sorely miss the wonderful people at Group 1, this transition will be seamless and our company could not be in better hands.”
Kenningham has been with Group 1 since 2011, when he joined as a regional vice president. His career includes time as the COO of Ascent Automotive as well as senior executive roles with Gulf States Toyota, where he worked from 1998 to 2011, and Nissan.
In the release, Kenningham said: “I am honored and excited to embark on this new role. I thank Earl for his outstanding leadership and the board for their confidence, guidance and support. We have an outstanding team at Group 1, and I am energized to work alongside them to chart our path forward for the benefit of our employees, customers, communities and stakeholders during this exciting and dynamic time in our industry.”
A dealership group in North Carolina’s Research Triangle region is turning to local car enthusiasts to help with one of the most pressing needs facing auto retailers today: finding employees, especially automotive technicians.
Another in the western half of N.C. is moving to state’s biggest city and bringing more jobs along the way.
Starting with Raleigh-based Leith Automotive Group, the retailer said it has teamed up with Morrisville Cars and Coffee, a free, year-round car show that’s open to the public, to help find job applicants.
The show is hosted 8 am to 11 am on the first Saturday of each month in Durham, and includes all makes and models of vehicles.
“By going to where car enthusiasts go, Leith is hoping to find people who not only love cars, but who are also willing to work hard for a company that offers many great benefits to the right candidate,” the dealer group said in a release.
Rodney Britt of Leith Toyota in Raleigh said in the release: “Our goal is to find other like-minded car enthusiasts that have a passion for the automotive industry like we do and are looking for a place to have a career, not just another job.”
The dealer group also keeps it local and turns to Wake Tech Community College, NASCAR Tech/Universal Technical Institute and the Chapel Hill High School’s automotive program.
Elsewhere in the land of the long leaf pine, one dealership group is moving from the birthplace of Cheerwine to the birthplace of Bojangles.
Team Automotive Group said Monday it is relocating its headquarters from Salisbury, N.C. to Charlotte, and has chosen Floyd Smith Office Park to set up camp.
“Team Auto Group is excited to call Charlotte its home and we have big plans to continue to grow into the Charlotte Metro market. As we expand, it’s important to us that in all we do — we build relationships that matter,” Team Auto Group president Kristin Dillard said in a news release.
“This begins with supporting our team and providing the best professional environment for our employees, so that they can deliver the best experience for our customers,” Dillard said. “Our new headquarters in Charlotte will consolidate our call center, accounting, marketing and leadership teams under one roof, delivering cohesion in our vision to win as a team.”
Since Dillard took over as president in 2017, the dealer group has grown from one location with 60 employees to six locations and 370 employees.
The group plans to grow to 10 locations with more than 650 employees. Team is moving 100 corporate jobs to Charlotte as part of the move.
This week, two of the publicly traded dealer groups made moves, as Sonic Automotive acquired another store, and Group 1 Automotive shared an announcement for its shareholders.
And another former star with the New York Yankees is opening a Honda dealership.
On Wednesday, Sonic announced it has acquired Audi Owings Mills, marking the company’s eighth Audi franchise and 112th franchised dealership overall.
Located in Owings Mills, Md., Sonic said the dealership serves residents of the greater Baltimore area and surrounding regions with a wide selection of new and pre-owned Audi vehicles and manufacturer-authorized parts and service.
“With the acquisition of Audi Owings Mills coming on the heels of our acquisition of Volkswagen of Fallston last year, we look forward to continuing to serve guests in the Baltimore metropolitan market and beyond with our world class guest experience, quality vehicles, and competitive pricing,” Sonic chief executive officer David Smith said in a news release.
Sonic president Jeff Dyke added, “We are excited to once again expand our national franchise sales and service network. The acquisition of Audi Owings Mills allows us to continue delivering on the Audi brand promise and provide our guests with even more choices in the Maryland market.”
Group 1 share repurchase & quarterly cash dividend
In other news, Group 1 announced on Tuesday that its board of directors increased the company’s common stock repurchase authorization by $130 million to $250 million and declared an increase to the quarterly cash dividend.
The company also updated its year-to-date repurchase activity of 1,546,856 shares of common stock at an average price of $176.80 for a total of $273.5 million, which represents 9.0% of Group 1’s outstanding share count as of Jan. 1.
Group 1 explained that purchases may be made from time to time, based on market conditions, legal requirements, and other corporate considerations, in the open market or in privately negotiated transactions.
The company said it expects that any repurchase of shares will be funded by cash from operations. Repurchased shares will be held in treasury, according to Group 1.
Furthermore, Group 1’s board of directors also declared a cash dividend of $0.38 per share for the second quarter. The company said the dividend represents an increase of 2.7%, or $0.01 per share, from the first quarter.
Group 1 indicated the dividend will be payable on Sept. 15 to stockholders of record as of Sept. 1.
“Our strong cash flow and balance sheet continues to enable significant capital deployment in 2022. Growing our U.S. and U.K. businesses while also returning capital to our shareholders remain our top capital allocation priorities,” said Earl J. Hesterberg, president and chief executive officer Group 1, which operates 204 dealerships located in the U.S. and U.K.
Rivera Honda set for grand opening
Mariano Rivera is looking to close in a different way.
The Major League Baseball Hall of Famer who was the closer during several championships won by the New York Yankees is ready to celebrate the grand opening of Mariano Rivera Honda located in Port Jefferson Station, N.Y.
“I’m excited to bring my business to the Port Jefferson Station community. As a native New Yorker, it means a lot to be able to get involved with the area and give back to the state I was raised in,” Rivera said in a news release.
As part of the grand opening celebration on Saturday, Rivera Honda will offer all Honda owners one complimentary car wash when they visit the dealership, as well their first oil change for free.
To show its love for the Port Jefferson Station community, the dealership will also hold drawings to give away a three-year lease and three years of vehicle service.
Dealer principal Kenny Hicks added, “Celebrating our grand opening has been a long time coming. We can't wait to provide the community with an unbeatable car buying experience.”
Another former Yankees Hall of Famer also got into the car business with a Honda dealership.
In January, Reggie Jackson teamed with Hendrick Automotive to open Reggie Jackson Airport Honda in Raleigh, N.C.
CarMax is trying to do more than just retail used vehicles nowadays.
The company recently released its 2022 corporate responsibility report, which features expanded disclosures and updates on progress across several key initiatives including diversity and inclusion, community impact and its goal of achieving net zero greenhouse gas emissions by 2050.
A few of the initiatives that are outlined further in the report include:
• CarMax established greenhouse gas reduction targets that demonstrate the company’s commitment to decarbonization. For the first time in the company’s history, the report discloses information on: reducing CarMax’s Scope 1 and Scope 2 GHG emissions by 50% by 2025 against the company’s 2018 baseline; and achieving net-zero carbon emissions by 2050 in accordance with the Paris Agreement.
• In calendar year 2021, CarMax’s renewable electricity use as a percentage of total electricity consumed was 17.23%, up from 15.73% in 2020, and 6.37% in 2019.
• CarMax expanded its diversity and inclusion commitment by adding additional resources, including a new dedicated role to progress supplier diversity. The company also significantly expanded educational efforts with more than 95% of associates and all board members completing quarterly educational lessons.
• The company increased hourly wages for the vast majority of field associates following a comprehensive review of the company-wide pay structure.
• In fiscal year 2022, CarMax invested more than $9.5 million in the communities where the company’s associates live and work through the CarMax Foundation and its other philanthropy efforts.
“Strong corporate social responsibility and ESG practices are integral to our company strategy and to driving long-term sustainable value for our associates, customers, communities, and shareholders for years to come,” CarMax chief executive officer Bill Nash said in a news release.
“I am excited by the level of rigor with which we have approached our ESG and sustainability efforts over this past year, and our focus on keeping our core values front and center. Looking ahead, we are extremely well-positioned to continue making a difference for our various stakeholders,” Nash went on to say.
The complete report can be viewed online via this website.
AutoNation is buying a captive finance company for its AutoNation USA standalone, used-car operation, said chief executive officer Michael Manley during the company’s second quarter earnings call on July 21.
Once the acquisition is complete, CIG Financial of Irvine, Calif., will aid with the expansion of AutoNation USA and improve the used-car operation’s financial performance, all with modest upfront investment and little risk, Manley said.
Group 1 Automotive, which held its second quarter earnings call on July 27, reported …
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Within Sonic Automotive’s EchoPark used-car store program, second-quarter revenues hit $665.6 million, an all-time high and a 12% year-over-year increase.
On the other hand, EchoPark retail used-vehicle unit sales volume of 16,608 was down 22% year-over-year.
During the Q&A portion of the retailer’s earnings call, participants asked …
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