Lithia Motors Expands Luxury Presence with Acquisition of Mercedes-Benz Dealerships in Southeast
- Lithia Motors acquires two Mercedes-Benz dealerships to enter the Southeast luxury automotive market and expand its brand portfolio.
- The acquisition is projected to generate $220 million in annual revenue, boosting total acquisition revenue to $400 million this year.
- Lithia plans to optimize luxury dealership performance while actively repurchasing shares, reinforcing its commitment to growth and shareholder value.
Lithia Motors Expands Into Southeast Luxury Market with Strategic Acquisition
Lithia & Driveway, the largest global automotive retailer, makes a significant move into the Southeast luxury automotive market by acquiring two Mercedes-Benz dealerships in Collierville, Tennessee, and Jackson, Mississippi. This strategic acquisition aligns with the company's broader goal of expanding its luxury brand portfolio and enhancing its presence in high-performing regions. The move is anticipated to generate approximately $220 million in annualized revenue, contributing to a total expected revenue of $400 million from acquisitions year-to-date. This entry into the luxury market signifies Lithia's commitment to diversifying its offerings and tapping into the growing demand for premium vehicles.
Bryan DeBoer, President and CEO of Lithia & Driveway, expresses excitement about the acquisition, highlighting the potential for accelerated growth in these newly acquired stores as part of their omnichannel ecosystem. This strategic focus on luxury vehicles not only strengthens Lithia's market position but also enhances its ability to serve a clientele that increasingly seeks high-quality automotive options. By integrating these dealerships into its existing operations, Lithia aims to leverage its extensive experience in the automotive retail sector to optimize performance and customer satisfaction in the luxury segment.
The acquisition is financed through Lithia's existing on-balance sheet capacity, reflecting the company's balanced approach to capital allocation. In addition to strategic acquisitions, Lithia has been actively repurchasing shares, having bought back around 729,000 shares this year for a total of $230 million. With a remaining authorization of $589 million for future repurchases, Lithia demonstrates a commitment to returning value to shareholders while pursuing growth opportunities. This dual strategy of acquisitions and share repurchases positions Lithia & Driveway for sustained success in an increasingly competitive automotive landscape.
In addition to these strategic moves, Lithia & Driveway maintains a robust network of physical locations complemented by e-commerce platforms, reinforcing its commitment to modernizing personal transportation solutions. The company continues to focus on delivering consistent and profitable growth, ensuring it remains a key player in the automotive industry as consumer preferences evolve.
As Lithia & Driveway expands its footprint in the luxury automotive sector, the company looks poised to enhance its offerings and strengthen its competitive edge, ultimately aiming to redefine the vehicle ownership experience for its customers.