Lithia ahead of AutoNation in new-car sales race


Through the first half of the year, Lithia sold 133,694 new vehicles, up 3.6 percent. AutoNation sold 114,332 vehicles for the same period, down 22 percent.

AutoNation CEO Mike Manley in a call with analysts Thursday said the second quarter new-vehicle volume decline “when you consider our low level of new inventory and our high inventory turn rates, was in my view purely a result of continued constrained supply.” AutoNation didn’t respond to a request for comment from Automotive News on the sales race.

Lithia has also bested AutoNation so far this year on the sale of new and used vehicles combined. Lithia retailed 288,409 vehicles overall for the first half, a 12 percent gain, while AutoNation sold 271,175 vehicles, a 9.3 percent drop.

‘Pretty good flow’
The country’s publicly traded dealership groups have all seen restricted sales because of the new-vehicle shortages, but both Lithia and AutoNation experienced supply improvements, albeit slight, between the end of March and the end of June.

Lithia reported a 32-day supply of new vehicles on June 30, up from 27 days on March 31.

AutoNation reported an 11-day supply of new vehicles on June 30, up from just eight days at the end of March.

The two companies’ supply metrics aren’t comparable as Lithia’s calculations include in-transit vehicles.

“Our domestic [brands] day supply on new is around 60 days, so we have pretty good flow even though there’s some in-transit on that,” Lithia CEO Bryan DeBoer said Wednesday in a call with analysts. “Really our softness in day supply, which is where we really are selling every car that we get about as quick as we can get them, is in our imports, which we’re sitting at a 16-day supply. Our luxuries are sitting at about a 29-day supply.”

He estimated that one-third of Lithia’s new-vehicle volume is pre-sold, down from about half 90 days ago.

“Since interest rates have come up, it definitely has affected things, but it’s… still a robust environment where those cars hit the ground and it’s someone that wants to drive the car and there’s two other people waiting to drive the same car,” DeBoer said. “It’s still a bit of a frenzy, and we imagine that it’ll continue through the rest of the year, especially knowing that supply lines for most manufacturers are going to remain quite tight until Q1 or Q2 of next year.”

AutoNation CFO Joe Lower said in the company’s analyst call that the retailer expects “demand to continue to outpace supply into the back half of 2022.”

He noted that 35 to 40 percent of domestic-brand vehicles are pre-ordered today, down from about half in the first quarter. Half of import-brand vehicles are pre-ordered, the same percentage as the first quarter, he said, and AutoNation’s luxury-brand pre-order rate has dropped slightly to 60 to 65 percent today compared with 70 percent in the first quarter. Still, all pre-orders are “significantly above” the levels they were at before the coronavirus pandemic began, Lower said.

Lithia’s shopping spree
Lithia passed longtime No. 2 Penske Automotive Group Inc. in new-vehicle sales last year as it continued an acquisition tear. Lithia bought Michigan’s 34-store Suburban Collection in April 2021, its biggest of several purchases last year. And the retailer has continued to acquire dealerships at a rapid clip in 2022.

Earlier this month, Lithia, of Medford, Ore., bought a Ford store in Northern California. At the end of June, Lithia acquired 10 dealerships in three transactions across South Florida and Nevada. In the first quarter, Lithia bought six dealerships in Northern California and Las Vegas in two transactions. Lithia has also shed some stores this year.

AutoNation, of Fort Lauderdale, Fla., acquired 20 franchised dealerships in 2021 in two large transactions. The company, which has not reported any dealership acquisitions so far in 2022, is using some of its capital to expand its AutoNation USA standalone used-vehicle business from 11 stores today to a planned 130-plus by the end of 2026.

Melissa Burden contributed to this report.



Read original article here

Denial of responsibility! TechnoCodex is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment