Lithia & Driveway make 3 distinct moves, reflecting company depth
Lithia & Driveway showed the depth and diversity of its automotive enterprise via the trio of moves the company announced on Tuesday.
The actions included the acquisition of five stores, an issuance of securities associated with its finance company and the launch of a state-of-the-art customer relationship management (CRM) and workflow platform.
The acquisition allowed Lithia & Driveway to expand its north central footprint with the purchase of five stores from the Wilde Automotive Group in Wisconsin.
According to a news release, the Wisconsin group was started by Harold Wilde in 1966 and includes Wilde Toyota, Wilde Subaru, Wilde Honda, Wilde CJDR and East Towne Honda.
Together, Lithia & Driveway said these stores are projected to generate $625 million in annualized revenue. LAD also expects to complete network optimization (divestitures) of approximately $625 million in annualized revenues in 2022.
Lithia & Driveway highlighted that the pipeline of opportunities to continue network expansion remains “robust, driving LAD to another banner year of growth.”
Lithia & Driveway president and chief executive officer Bryan DeBoer then said in the news release, “We are excited to welcome these high performing teams to our Lithia & Driveway family.
“Their continuous pursuit of excellence has earned them numerous awards including the President’s recognitions for both Honda stores and the Toyota store, as well as excellent reputations for serving their customers and communities,” he added.
Meanwhile, the company said in the same release that Driveway Finance Corp. (DFC) completed its second issuance of securities backed by its originated auto finance portfolio, raising more than $298 million of additional capital to fund growth.
“DFC continues to receive favorable pricing and credit ratings,” Lithia & Driveway vice president of finance Chuck Lietz said. “We’re confident in our ability to fund DFC using a combination of our conduit facilities and securitizations, enabling us to grow DFC in the coming years and support LAD’s achievement of more than one dollar in EPS for each billion dollars in revenue.”
The company shared that DFC originations now account for approximately 10% of LAD’s overall business and are expected to grow to 15% in the coming years.
Executives pointed out this growing income stream further diversifies LAD’s business model, expands profitability, and enhances consumer loyalty with its stores, and its national Driveway and GreenCars brands.
Finally, Driveway activated Freeway, a state-of-the-art customer relationship management (CRM) and workflow platform, empowering its care centers to serve customers more seamlessly and efficiently as they buy, finance, sell, and service their vehicles from the comfort of their homes.
“We are excited to deploy Freeway, our latest strategic platform to further fuel the growth of Driveway and omni-channel capabilities at LAD,” Lithia & Driveway chief innovation and technology officer George Hines said.
“We create competitive advantage by leveraging technology and data to anticipate the needs of our customers. Our Freeway platform empowers our Driveway Care Centers with a unified view of our customer’s journey to meet their needs most efficiently,” Hines went on to say.