Lithia Motors Inc.’s 2012 profit growth strategy will include cost-cutting measures, streamlining store operations and pursuing acquisition opportunities, chief executive Bryan DeBoer said at an investor conference in New York. According to DeBoer, his goal is to stay focused, keep capital discipline and continue to grow the business.
DeBoer said Lithia expects its 2012 net profits to range from $2.45 to $2.53 per diluted share, up from last year’s net income of $2.09 per diluted share or $55.8 million. Lithia posted $16.7 million in net income for the first quarter of 2012, compared to $8.7 million in same period in 2011. The company’s revenues soared 30 percent to $759 million.
Lithia ranks No. 9 on the Automotive News list of top dealership groups in the United States, posting 44,537 retail new-vehicle sales in 2011. The company currently operates 86 stores in 11 states.
According to DeBoer, Lithia is eyeing to open new dealerships in 80 markets west and 160 markets east of the Mississippi River. With over $100 million in available funds for acquisitions, Lithia is considering buying dealerships that sell Chevrolet, Ford, Honda, Hyundai, Nissan, Subaru and Toyota franchises.
According to DeBoer, Lithia is bit different from other operators as the company operates exclusively in its markets, which means that it is the only dealer representing that brand in a market. DeBoer said Lithia target markets are usually rural areas that have populations of under 250,000 people. Lithia’s CEO remarked that the company is mulling to seep into more populous markets for luxury import dealership acquisitions. Lithia currently caters to around 30 of the 500 U.S. metro markets serving luxury brands.