Lithia Motors Inc. logged a 38-percent climb in net income in the fourth quarter of 2013, boosted by revenues that were at the highest level since its start as well as by continued cost controls and robust sales of new and used vehicles. For the fourth quarter of 2013, the dealership group saw its net income surge to $27.4 million from $19.8 million and had its revenue leap 17 percent to $1.02 billion from $877.3 million.
This will be the third straight quarter that Lithia topped $1 billion in revenues. Lithia logged a 32-percent rise in net income in full year 2013 to $106.0 million from $80.4 million a year ago. It also posted a 21-percent leap in full-year revenue to $4.01 billion from $3.32 billion a year ago.
For the year, Lithia saw its new vehicle retail sales rise 20 percent to 66,857 units and used vehicle retail sales jump 19 percent to 57,061 units. Lithia’s average gross profit on new cars in 2013 dropped $155 to $2,260 while average gross profit on used cars leaped $106 to $2,644.
The average gross profit on finance and insurance jumped $39 to $1,122 per vehicle. Lithia is targeting an F&I of $1,125 this year. Lithia chief executive Bryan DeBoer told Automotive News in an interview that they expect a conquest market share of 2 to 4 percent this year. “Our single best way to do that is help our people in the stores recognize what our customers are truly desiring and see what our competitors are really good at,” DeBoer said.
He said in an earlier statement that the group maintained cost discipline over the last four years of growth, "resulting in expanding operating margin each year." He added that significant opportunities remain to increase used-car sales and to “capture the coming wave of service work from greater vehicle sales volumes over the last few years." The dealership group sold an average of 53 used vehicles per store in the fourth quarter of 2013, and is aiming to increase that figure to 75.