The end of Lithia & Driveway’s second quarter came with good news for the publicly traded company.
The retailer reported the highest Q2 revenue and earnings per share in company history ($0.42 per share for the second quarter).
Lithia’s Q2 revenue was …
The racecar that will prominently feature the Zeigler Auto Group next weekend at Michigan International Speedway likely will be traveling tremendously faster than the vehicles involved in upcoming teen driver education classes to be hosted by AutoNation.
The two auto groups announced campaigns this week meant to connect with their communities in different ways, but leadership has high hopes for success.
Zeigler Auto Group is an anchor sponsor of Josh Bilicki’s Spire Motorsports Chevrolet which will be the No. 77 Michigan State University/Zeigler Automotive Chevrolet featuring a special Michigan State paint scheme for the NASCAR Cup Series FireKeepers Casino 400 on Aug. 7.
Michigan State head men’s basketball coach Tom Izzo and head football coach Mel Tucker will serve as co-grand marshals for the race at Michigan International Speedway
“Zeigler is excited to bring in superstar MSU coaches Mel Tucker and Tom Izzo as grand marshals for our upcoming home race at Michigan International Speedway,” said Zeigler Auto Group president and chief executive officer Aaron Zeigler said in a news release.
“As long-time supporters of MSU, having the Spartans aboard our Zeigler.com 77 is a huge honor for us, especially when it will be featured right here at home,” Zeigler continued. “MIS was the first place #TEAMZEIGLER sponsored a NASCAR race car, and we are proud to say that Josh Bilicki was behind the wheel that day, as he will be on August 7.”
Izzo, who just concluded his 27th year, has compiled an impressive list of accomplishments, including the 2000 NCAA National Championship, 10 regular-season Big Ten Championships, six Big Ten Tournament titles, eight Final Four appearances, eight National Coach of the Year awards and a Big Ten-record 24 straight NCAA Tournament appearances.
Izzo said, “A special thank you goes to Aaron Zeigler for showing his Spartan Pride with the Michigan State University/Zeigler Automotive Chevrolet.”
Tucker led the Michigan State football team to their biggest turnaround in school history in 2021, his second season with the team. The Spartans finished 11-2 with a Top 10 ranking and a win in a New Year’s Six Bowl, earning Tucker Big Ten Coach of the Year honors. He also was named a finalist for National Coach of the Year by multiple organizations.
Tucker said, “I’m looking forward to seeing the Michigan State University/Zeigler Automotive Chevrolet car in person and in front of thousands of fans at Michigan International Speedway.”
Bilicki added his perspectives on driving this green and white racecar during the upcoming race.
“My relationship with Zeigler Auto Group began at Michigan International Speedway in 2019,” Bilicki said. “Since then, I’ve enjoyed getting to know their team, many who have become like family to me. Team Zeigler is very competitive and passionate about everything they are involved in, from business to supporting local sports teams. I’m so thankful for the collective support and look forward to carrying the Michigan State University/Zeigler Auto Group colors at their home race next weekend.”
Meanwhile, drivers not quite with the experience of a NASCAR competitor can get some tutelage from AutoNation
As novice teenage drivers head back to school this year to begin an exciting new chapter in their academic and social lives, particularly with a newly minted independence of a driver’s license, AutoNation announced it will host complimentary one-hour Teen Driver Safety Clinics at AutoNation USA stores nationwide to help promote a safe ride.
“The top risks for new teen drivers range from distractions from their phone to inexperience, speeding, and nighttime driving,” AutoNation executive vice president and chief customer experience officer Marc Cannon said in a news release. “Education is key to helping young new drivers stay safe on the road, which is why we are partnering with local organizations to host clinics around the country that will teach teens safety skills, along with some essential car care tips.
“We are proud to offer this complimentary community service for the first time this year,” Cannon continued.
AutoNation’s Back to School Teen Driver Safety Clinics are one hour and taught by a community expert on the topic. Driver safety curriculum includes a range of topics such as distracted and impaired driving, proper driving positioning, and seatbelt usage, as well as instruction on what to do when pulled over for a traffic violation or when faced with a field sobriety test.
A local AutoNation service associate will also be present at each location to share hands-on car care tips such as jumpstarting a battery, proper tire inflation, changing a flat tire, checking vehicle fluids and safety items to store in a car in case of an emergency.
Students and parents who participate will have opportunities to ask questions and will receive a mini car care kit with essential items to support their safety and car care journey.
Parents and or guardians are encouraged to participate with their teen(s). Registration is required to attend.
To find the nearest AutoNation USA store and register a teen for a complimentary session, visit https://www.facebook.com/pg/autonation/events/.
Sonic Automotive’s review of “potential strategic alternatives” for its EchoPark Automotive chain of used-car stores — announced almost exactly a year ago — has concluded.
The retailer said Thursday in its quarterly earnings release that after assessing various alternatives, it found, “that timing and current market conditions do not align with the company’s value creation objectives for the business.”
Sonic said it will continue expanding EchoPark as planned, “and will monitor market conditions and periodically consider potential opportunities to maximize long-term shareholder value as they arise,” the group said in the release.
“Further, while the company remains confident in EchoPark’s long-term prospects, the current market environment has caused the Company to adjust EchoPark’s projected revenue growth and push back the achievement of its previously stated financial goals beyond 2025.”
In Thursday’s earnings release, Sonic president Jeff Dyke shared some specifics on EchoPark’s performance in the second quarter.
Noting that Sonic opened three new EchoPark locations and finished rolling out the EchoPark.com ecommerce platform, Dyke said, “Our new ecommerce platform accounted for 19% of our EchoPark retail unit sales volume in the second quarter, allowing our guests to shop their way via a modern omnichannel purchase experience or a seamless end-to-end online transaction.
“In addition, we expanded into new customer segments by adding older model year vehicles to our EchoPark inventory at more affordable prices, driving an increase in our non-auction sourced inventory mix to 25% of sales volume in the second quarter, up from 7% in the prior year,” Dyke said.
“We continue to adapt our business in the face of ongoing challenges in the used vehicle industry, from inventory procurement to consumer affordability. With the flexibility of the EchoPark model, we remain confident in EchoPark’s long-term prospects and remain on track to reach 90% U.S. population coverage by 2025.”
In other dealer group news, Dutch Miller Auto Group has purchased Cody Foster Buick GMC of El Dorado, Kan., according to a news release from Performance Brokerage Services announcing the sale.
The store will be renamed Dutch Miler Buick GMC of El Dorado. It opened in the 1950s and was purchased by Cody Foster in 2020, Performance said.
Lithia & Driveway has named a senior vice president of Driveway & GreenCars. Appointed to lead the strategy of these ecommerce platforms is Carol Deacon, who joined the retailer last year when it acquired Toronto’s Pfaff Automotive Group.
Deacon was Pfaff’s chief operating officer and previously worked at McKinsey & Company and Canadian Tire.
“Carol adds a powerful dimension to our operations team as we continue to leverage ecommerce technology to fuel new relationships with customers who are looking for alternate avenues to modernize their personal transportation needs,” Lithia’s president and chief executive officer Bryan DeBoer said in a news release.
“Carol brings a multi-industry record of growth and performance-driven results to this new assignment,” DeBoer said.
Autonomy has teamed up with AutoNation in a partnership the electric vehicle subscription company says will help it scale — both in terms of geographic and product expansion.
Currently, Autonomy offers the Tesla Model 3 and Model Y, but AutoNation, which will be Autonomy’s “Dealer of Record,” will aid the company in its plans to acquire as many as 20,000 electric vehicles from additional automakers over the next year to year-and-a-half.
The retailer will also provide vehicle preparation and delivery as part of Autonomy customer activations, along with maintenance, repair and reconditioning for Autonomy’s subscription fleet.
“AutoNation and Autonomy’s shared vision for how consumers gain access to electric vehicles is the basis for this partnership and has again shown that AutoNation is among the most innovative and forward-thinking retailers in the world,” Autonomy founder and chief executive officer Scott Painter said in a news release.
“This partnership allows Autonomy to drastically accelerate and diversify its vehicle lineup with a 20,000-vehicle order over the next 12-18 months while paving a clear and aggressive path for national expansion,” Painter said.
“Just as importantly, this also allows Autonomy to remain capital efficient and infrastructure light as we advance our mission to accelerate the adoption of EVs and scale subscriptions profitably.”
This move arrived just a few days after Autonomy finalized a relationship with EV Mobility, which provides EVs on demand 24/7 as an amenity to luxury hotels as well as at multifamily apartment buildings and other commercial properties through its mobile app.
This roundup of dealer news includes one group rolling out an online retail platform fueled by Cox Automotive’s technology, while another group is growing its footprint near the nation’s capital.
Beginning on the acquisition front, Graham Holdings Co., announced on Wednesday that it has acquired a Toyota dealership and a Chrysler-Dodge-Jeep-Ram dealership in Woodbridge, Va., from the Lustine Automotive Group.
According to a news release from Graham Holdings, the purchase price was not disclosed.
The announcement indicated Christopher Ourisman, a member of the Ourisman Automotive Group family of dealerships, and his team will operate and manage the dealerships. Graham Holdings holds a 90% stake in the stores.
The company also owns four other dealerships, including:
—Ourisman Lexus of Rockville
—Ourisman Honda of Tysons Corner
—Ourisman Jeep Bethesda
—Ourisman Ford of Manassas
According to a news release from Haig Partners, which served as the exclusive sell-side advisor, Graham Holdings is a diversified holding company headquartered in Arlington, Va. It was formerly the owner of the Washington Post newspaper and Newsweek magazine.
Graham Holdings now invests in a variety of industries, including dealerships.
“We thank the Lustine Family for giving us the opportunity to represent them on the sale of their dealerships to the Graham Ourisman partnership,” Haig Partners president Alan Haig said in the news release. “Mr. Burton Lustine built two highly profitable dealerships and has been a fixture in the D.C. Metro auto retail business for decades before passing away late last year.
“And we send our congratulations to Chris Ourisman and the Graham Holdings team on this acquisition that will grow their group in the D.C. metropolitan area, one of the best car markets in the country,” Haig continued. “We like this partnership between knowledgeable operators that have the support of the OEMs with investment firms that are looking for attractive returns on the capital they are putting to work.
“Toyota and Chrysler-Dodge-Jeep-Ram dealerships are performing particularly well over the past year given their ability to produce and deliver attractive products to dealers, and that they remain committed to the traditional franchise system,” Haig went on to say after being involved in the purchase or sale of 15 dealerships in Virginia.
Haig Partners has advised on the sale of 29 dealerships nationwide so far in 2022.
Mike Charapp and Barrie Charapp Beaty of Mahdavi Bacon Halfhill & Young provided legal counsel to Lustine Automotive Group.
In April, the Jeff Wyler Automotive Family completed its first vehicle sale transaction using cryptocurrency, as the dealer group sold a certified pre-owned 2021 Mercedes-Benz S580 to a buyer in Saudi Arabia.
Whether it’s with cryptocurrency, cash or traditional financing, the group is looking to leverage technology even more to retail used vehicles. On Wednesday, Jeff Wyler announced the launch of WylerComplete, a 100% online vehicle buying experience for pre-owned vehicles.
WylerComplete is designed to allows customers to go through the entire car buying process online — from the initial search and financing to remote signing and scheduling delivery — in less than 15 minutes.
WylerComplete shoppers can look forward to the following benefits:
• Wide selection of quality pre-owned vehicles
• Transparent pricing
• Scheduled delivery
• Opportunities with Kelley Blue Book Instant Cash Offer (ICO)
• Aftermarket product and insurance offerings specific to each customer
• Safe and secure deal completion, signing of paperwork and online payments
WylerComplete leverages Cox Automotive’s Esntial Commerce technology, which guides consumers through the online buying process.
“Unlike some of the other online car buying sites, Wyler is locally owned and has been doing business in the Cincinnati market since 1973,” said David Wyler, president of Jeff Wyler Automotive Family. “With the launch of Wyler Complete we can expand our reach in the market and offer the convenience of a fully online shopping experience with the benefit of being able to call our highly knowledgeable sales team or come into our dealership at any point along the way.
“At Wyler, we are always here for our customers before, during and after the purchase of their vehicle to make sure they are completely satisfied,” added Wyler, who serves customers predominantly from Ohio, Kentucky and Indiana.
Group 1 Automotive has exited Brazil.
The dealer group said Tuesday it has closed on the disposition of its operations in the South American country, after nine years there.
Group 1’s wholly owned subsidiary GPI SA, LLC closed the sale under the share purchase agreement with Original Holdings S.A.
UAB Motors Participações Ltda., which is a wholly owned subsidiary of the Houston-based dealer group, was an intervening party.
Per the agreement, Original acquired all of the issued and equity interests of UAB from Group 1 for 510 million BRL in cash.
“I want to thank our employees in Brazil for their dedication and work ethic over the past nine years of Group 1's ownership,” president and chief executive officer Earl Hesterberg said in a news release.
“This great team was instrumental in the development of a very successful and professional automotive dealership group,” Hesterberg said. “As announced last year, our strategic decision to exit the Brazilian market and redeploy capital to other growth opportunities is in the best interest of our shareholders.
“We look to continue growth via acquisitions in both the U.S. and U.K. markets, while also returning capital to our shareholders.”
As hot as those fireworks that will explode during the upcoming Fourth of July weekend is dealership M&A activity since two more transactions became public knowledge on Wednesday.
Beginning with the McGovern Automotive Group, the New England franchised store operator announced its 20th dealership acquisition during the past five years. Now part of the group is Lundgren CDJR: Chrysler Dodge Jeep RAM in Greenfield, Mass.
McGovern has experienced significant growth to achieve revenues near $2 billion, employing more than 1,100 people and selling more than 27,000 vehicles per year across Massachusetts, New Hampshire and New York.
The group’s diverse portfolio spans luxury brands such as Ferrari, Porsche, Maserati, BMW, Audi, as well as other badges such as Subaru, Chevrolet, Toyota, Ford, and Hyundai.
“I started McGovern Automotive Group to build the best auto dealership group in the business with my own hands, without any bureaucratic influences from outside investors,” chief executive officer and founder Matt McGovern said in a news release. “I knew the most important action item was to recruit the most talented management team, which I quickly assembled from the many loyal relationships I cultivated during my 20+ years in the automotive sector.
“It is so enjoyable for me personally to work every day with a group of people that are all fully aligned with our mission,” McGovern continued. “Our employees are hands-down our biggest asset, and the success we’ve had is testament to their hard work, commitment, and determination to be the best in the business; always going the extra mile to deliver value for customers.”
CliftonLarsonAllen (CLA), one of the leading professional service firms in the United States, announced on Wednesday that it helped the Rehkemper family find a new owner for its Tri Ford dealership in Highland, Ill.
The store now it is part of the Lou Fusz Automotive Network, which is based in St. Louis.
Started in 1968 by David Rehkemper, Ed Moenster, and Clinton Rogier, Tri Ford became one of the largest businesses in Highland, which is less than an hour away from St. Louis. By 2006, Rehkemper had become the sole proprietor of Tri Ford.
After his passing in 2010, Monica Rehkemper stepped into the role of sole owner-operator, and along with her son Eric, continued to build the dealership operation.
After operating the dealership for more than a decade, Monica Rehkemper eventually decided it was time to move on to the next chapter of her life.
“The sale of our store brings many emotions as we have been rooted here for over 50 years, but I am thrilled with the outcome,” she said in the news release. “I know the Fusz family will continue to provide members of the Tri Ford community with great care and service. I also know they look forward to affording our great team at Tri Ford opportunities for success and growth in the future.”
Ben Axelrod is the head of the investment banking practice at CLA, which mentioned the firm had conversations with numerous prospective buyers, including detailed discussions with several high-quality groups, before the deal come together with the Lou Fusz Automotive Network.
“It was a pleasure to work with Monica and help her achieve these retirement objectives,” Axelrod said. “We knew it was important to Monica to not only find a strong operator who would continue to build on what Dave, Monica, and Eric have built, but also somebody who has a fantastic reputation in the community and the close-knit dealership ecosystem in the area.
“With the Fusz organization, we found a highly experienced, professional team set on curating their expansion in the greater St. Louis area and the state of Illinois Axelrod continued. “Lou Fusz Automotive was a great fit for Monica and Eric’s objectives and we wish the team at Lou Fusz Ford of Highland success in the next chapter of this dealership.”
Many folks love to vacation either in south Florida or Las Vegas.
Lithia & Driveway are looking to retail more vehicles to potential buyers who might reside in those locations.
The company announced on Tuesday it has expanded its south Florida footprint with the purchase of nine Lehman Auto World stores and two Esserman International stores in Miami-Dade County.
Together, these 11 stores are projected to generate $850 million in annualized revenue, according to a company news release.
According to a news release from Haig Partners, which served as the exclusive sell-side advisor, Lehman Auto World consists of:
—Largo Honda
—Doral Hyundai
—Doral Kia
—Doral Genesis
—Lehman Subaru
—Lehman Hyundai
—Lehman Buick-GMC
—Lehman Genesis
—Lehman Mitsubishi
As a part of this transaction, Lithia also acquired Esserman International which consists of Esserman Acura and Esserman VW in Doral, Fla.
LAD also announced its expansion in Las Vegas with the addition of Henderson Hyundai and Genesis. With this purchase, LAD said it becomes the sole owner of the Hyundai and Genesis stores in the greater metro area.
This is LAD’s eighth Las Vegas metro store purchase in the past year and adds a projected $100 million in annualized revenue.
“We are thrilled to welcome these teams to our Lithia & Driveway family,” Lithia & Driveway president and chief executive officer Bryan DeBoer said in the news release. “The Lehman family has deep roots in south Florida, serving the community for over 86 years. Under its leadership, the stores have achieved a reputation for earning lifelong customers with their impeccable level of service.”
The company explained the additions of Lehman Auto World, Esserman International, and Henderson Hyundai and Genesis bring LAD’s total expected annualized revenue acquired in 2022 to over $2.1 billion.
The company added that it is pacing to exceed its 2025 plan to reach $50 billion in revenue and more than $55 in EPS.
Lithia & Driveway mentioned these acquisitions were financed using existing on-balance sheet capacity.
William “Bill” Lehman, Jr., the principal owner, explained his rationale for the sale through the Haig news release.
“On a personal level, I asked my wife, when do I retire? When do I smell the roses? I’ve had one job my whole career running these dealerships. I’ve had a great run. I’m 81 and I think it’s time. From a corporate perspective, there is continued consolidation in the automotive retail space, so when Lithia expressed interest in starting initial conversations with us, I felt that this was not only the right time but the right company,” Lehman said.
“I thank Alan Haig and the team at Haig Partners for introducing us to Lithia and advising us on the sale process. This was a complicated transaction and they were integral to helping it to come off smoothly. Jonathan Awner at Akerman LLP was also impressive in his ability to negotiate the legal agreements and close a large transaction like this,” Lehman continued.
Alan Haig, president of Haig Partners which represented the seller, added these perspectives.
“We congratulate Bill Lehman, Jr. on the sale of his dealerships to Lithia Motors. He built Lehman Auto World into one of the largest groups in the state. They operate high volume stores, including Hyundai in Doral which consistently ranks as a Top 5 dealership in terms of sales,” Haig said.
“Also, we tip our hats to Bryan DeBoer and the Lithia team with this significant investment in one of the most desirable auto retail markets anywhere in the world. South Florida is growing rapidly and we believe Lithia will do very well with these eleven dealerships. Welcome to South Florida! This transaction demonstrates that buyers remain confident about the future profitability of auto dealerships and want to continue to grow,” Haig went on to say.
Lithia & Driveway offered an update on another part of its business operation.
To date in the second quarter, the company has repurchased approximately 1.9 million shares or approximately 6.5% of shares outstanding at a weighted average price of $284.
To date in 2022, Lithia & Driveway have repurchased approximately 2.1 million shares at a weighted average price of $285.
Under the current share repurchase authorization, approximately $116 million remains available.
“With our strong balance sheet and continued significant free-cash flows, we continue to successfully execute on our revenue 2025 plan, while still opportunistically repurchasing a meaningful amount of shares, providing immediate shareholder return,” DeBoer said in the same news release.
Van Horn Automotive Group has launched an online used-car buying platform called CloudLot that allows consumers to conduct all car-buying steps from selecting a vehicle to scheduling delivery completely online.
The platform, which is available at ShopCloudLot.com, is powered by Cox Automotive’ Esntial Commerce technology.
“As Wisconsin’s only employee-owned auto group, we will continue to provide the same personalized car-buying experience that our customers have loved for more than 55 years; but now with CloudLot, we can serve a new set of car buyers that are looking for a totally digital option,” Van Horn vice president of dealership operations Adam Gaedke said in a news release.
“The benefit of purchasing online through CloudLot is the backing of a 19-dealership auto group, dedicated employee owners and a network of service centers,” Gaedke said. “We want the customer to feel empowered to manage their own purchase, but also know we’re here to support them during and after the sale.”
Ryan Thiel, the group’s marketing director, added: “We want people to buy cars on their terms and on their time. Whether in-person, online, or a little of both, we now have options to match any buyer’s preference.”
In other dealer group news, Gee Automotive Companies has purchased Tucson Subaru in Arizona from Rocky and Mike DiChristofano, two brothers who run their family’s business.
The news arrived via press from Performance Brokerage Services.
Rocky DiChristofano, who is president of Tucson Subaru, said in the news release: “I want to thank Jason Stopnitzky of Performance Brokerage Services for his friendship, and for his help with our recent buy-sell.
“My brother and I really enjoyed working with Jason and the Performance team when we sold our Volvo store a few years ago, and we wouldn't have considered working with any other broker when it came to selling our Subaru store. We appreciated Jason’s professionalism, ease of doing business, and extensive resources during the sale process,” he said. “Jason was able to find us the right buyer, at the right terms, and a fair price. We couldn't be happier with Jason or the transaction. Thank you to Jason for being such a great business partner and friend through the years. I would certainly recommend Jason and Performance Brokerage Services to any dealer looking to sell their store.”
Gee Automotive Companies has dealerships throughout Washington state, Idaho, Oregon and Arizona.
