A boost in Lithia Motors’ used-vehicle sales is an indication the automotive industry is tracking a positive trajectory on the heels of the coronavirus economic crisis, and the franchise retailer has announced plans for an acquisition during the third quarter.
Lithia Motors jumped on a growth train in June, reporting a 23% upsurge in year-over-year used-vehicle sales up from an 8% YoY increase in May. Similarly, June same-store web traffic, by which the company measures unique visitor interest, skyrocketed over 50% YoY following up from a 40% YoY increase in traffic in May.
“Lithia is primed for the second half of 2020 with the expansion of our proprietary e-commerce home channel and the further acceleration of our growth strategy,” said President and Chief Executive Bryan DeBoer in a statement.
New-vehicle sales, however, have yet to show improvement for the auto retailer. Lithia reported a 15% YoY drop in June sales, in line with American Honda and Subaru Motors’ June sales figures. Average transaction prices are also rising and are projected to increase 3.2% from 2019.
The uptick in used-vehicle growth isn’t the only good news for Lithia, which today announced an acquisition of two dealerships, Smolich Chrysler Jeep Dodge Ram and Smolich Nissan, both based in Bend, Ore. The acquisition should provide approximately an additional $100 million in annual revenue, according to a company statement.
“As the automotive retail environment continues to show significant sequential improvements, we have restarted acquisitions, completing the first two pending acquisitions,” DeBoer said. “Growth of our network is the foundation to the fulfillment of our current and future brand promises, regional logistics plan and ability to provide competitive customer offerings through all six business lines.”
Lithia Motors [NYSE: LAD] was trading at $160.18 at market close, up 1.41% since market open. The retailer has a market capitalization of $3.65 billion.