Profile: Lithia Motors Inc (LAD.N)
29 Jul 2014
Lithia Motors, Inc. incorporated in 1968, is an operator of automotive franchises and a retailer of new and used vehicles and services. The Company sells new and used cars and light trucks and replacement parts; provides vehicle maintenance, warranty, paint and repair services; and arranges related financing, service contracts, protection products and credit insurance. As of February 24, 2012, it offered 25 brands of new vehicles and all brands of used vehicles in 86 stores in the United States and online at Lithia.com. Its dealerships are primarily located throughout the Western and Midwestern regions of the United States. In April 2014, the Company acquired Access Ford in Corpus Christi, Texas. In June 2014, Lithia Motors Inc acquired Alfonso Cadillac and Braley & Graham Buick GMC in Portland, Oregon.
During the fiscal year ended December 31, 2011, it sold three stores: a Chrysler Jeep Dodge store in Concord, California; a Volkswagen store in Thornton, Colorado, and a GMC Buick and a Kia store in Cedar Rapids, Iowa. The Company offers a 60-day, 3,000 mile limited warranty on the sale of retail used vehicles. It also offers a 3-year, 50,000 mile warranty on parts used in its service repair work and a 2-year warranty on tire purchases. The Company sells service warranty policies to its customers issued by a third-party obligor.
In 2011, the Company sold 43,273 new vehicles. New vehicle sales also have creates profit opportunities through manufacturer incentives, resale of trade-in vehicles, sale of third-party financing, vehicle service and insurance contracts, and future service and repair work. In 2011, the Company represented 26 domestic and import brands ranging from economy to luxury cars, sport utility vehicles, crossovers, minivans and light trucks. The Company purchases its new car inventory directly from manufacturers.
At each new vehicle store, the Company also sells used vehicles. In addition, the Company’s stores were selling an average of 40 retail used vehicle units per month, as of December 31, 2011. The company offers used vehicles in three categories: manufacturer certified pre-owned used vehicles; three to seven years old, lower-mileage vehicles; and value autos. It offer manufacturer certified pre-owned used vehicles at most of its franchised dealerships. The Company acquires its used vehicles through customer trade-ins and at closed auctions. It also purchases vehicles directly from customers visiting its stores, private parties advertising through local newspapers, competing dealers and online.
Vehicle Financing, Service Contracts and Other Products
As part of the vehicle sales process, the Company offers its customers financing options, as well as extended warranties, insurance contracts and vehicle and theft protection products. It earns a commission on each finance, service and insurance contract it writes and subsequently sells to a third-party. During 2011, it arranged financing on 73% of the vehicles, which it sold. The Company also markets third-party extended warranty contracts, insurance contracts and vehicle and theft protection products to its customers. It offers a lube, oil and filter (LOF) service, which, in 2011, was purchased by 36% of its total new and used vehicle buyers.
Service, Body and Parts
The Company provides parts and service primarily for the new vehicle brands sold by its stores, but the Company also service other makes and models. It markets its parts and service products by notifying owners when their vehicles are due for periodic service. Its Assured Service provides customer benefits, such as same day service, upfront price guarantees and a three-year/50,000 mile warranty on repairs. It has also launched Assured Automotive Products on commodity items, such as tires, filters and batteries. As of December 31, 2011, the was operating 14 collision repair centers: four in Texas; three in Oregon; two in Idaho; and one each in Alaska, Washington, Montana, Iowa and Nevada.
Lithia Motors Inc
150 NORTH BARTLETT STREET
MEDFORD OR 97501