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10-26-2012, 02:11 PM | #1 |
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Lithia sells off CJDR and Hyundai stores in Renton and buys Toyota store in Montana
Lithia issued a press release indicating that they've sold-off Lithia Chrysler Jeep Dodge Ram of Renton and Lithia Hyundai of Renton. Lithia also announced that they purchased a Toyota dealership in Missoula, Montana. For the full Press Release - click here
I thought it was interesting the Press Release indicated that the sale of the two Renton dealerships will not impact Lithia's earnings because the stores were already classified as "assets listed for sale" and categorized as part of Lithia's discontinued operations. The other comment that caught my attention was this quote from Lithia's CEO, Bryan DeBoer "We are excited to expand our presence in Montana, one of our strongest states. This store fits our core strategy of seeking exclusive franchises in our markets. We also completed the sale of two metropolitan market stores that lack the franchise exclusivity we seek in our portfolio." It appears that Lithia prefers to play in smaller markets where they have the only franchise in the market, and not engage in the "chase to zero" that often happens in the metro market where you have a number of dealers who may be competing to hit their Dealer Cash objective. Frankly, I think it's a smart business plan. I'd also guess there's less employee turn-over in the smaller markets and the lower rent factors add to the bottom line. |
10-26-2012, 02:55 PM | #2 |
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Lithia sold the two stores in Renton, WA to Ken Phillips from Car Pros.
Ironically, we sold those stores to them years ago. The dealer of the CDJ was then Ed Fitzpatrick and Rich Snyder owned the Hyundai at that time. Moshe Stopnitzky www.performancebrokerageservices.com |
10-26-2012, 10:19 PM | #3 |
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Moshe,
Thanks for the update. I figured if there was any action in the market you'd know what was happening. Concerning Ed Fitzpatrick, I used to call on his store back in the days when he was still in the MID program. To the best of my knowledge he has a Mercedes dealership and a BMW dealership in Northern California now. Concerning Ken Phillips, I'm pretty sure he lost his CJ store in the Los Angeles area as part of the 789. It will be interesting to see if he intends to be a long term owner for the CJDR store or whether it was a package deal with the Hyundai store. I know Phillips has been very successful with his KIA store in the Tacoma area and I imagine he'll do great with the Hyundai store. Thanks again for the update. |
10-27-2012, 04:59 PM | #4 |
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Scott,
To complete the update - Ed Fitzpatrick owns 3 dealerships in Central/Northern CA: A BMW store in Modesto and 2 Lexus stores, one on Modesto and one in Oakland. I will see Ed next week. I will bring your name up. Concerning Ken Phillips - he did lose his Chrysler lines in Los Angeles, And yes, he is the KIA in Tacoma. He also owns two other KIA stores in Carson, CA and Huntington Beach, CA. By the way, in June 2012 he was the number one volume KIA dealer in the nation! Additionally, Ken Phillips owns the Suzuki in Tacoma and the Nissan in Burien, WA. As for his recent Hyundai acquisition - he should do well with it. He is very familiar with that brand in WA. He was extremely successful with that brand in Lacey, WA years ago before the brand was as popular as it is today. We sold it then to Titus/Will and moved it to the auto Mall in Olympia. Now you are current. Moshe Stopnitzky www.performancebrokerageservices.com |
10-28-2012, 04:38 PM | #5 | ||
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The last time I saw Ed he had just finished giving a presentation at the Automotive News World Congress. We had a chance to chat for a few seconds but he was surrounded by reporters and other people who needed his attention. It's great to hear he's doing well with his three dealerships - his timing in selling his CJD store to Lithia certainly proved to be fortunate. Quote:
I had forgotten that Ken bought the Nissan store in Burien. I remember we had a thread on the forum about that store when it closed and it seemed to take a long time for Nissan to get everything sorted out and find a new dealer for the store. I wish Ken the best of luck with his new stores - given his track record I'm sure he'll do great. |
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10-29-2012, 09:19 AM | #6 | |
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10-31-2012, 10:55 AM | #7 | |
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I was guessing the reason Lithia preferred to play in markets with only one location for each OEM is because it would give them greater control over pricing. If your local dealer has to go to invoice pricing just to compete with a nearby Lithia store that doesn't appear to be the case. That said, I wonder if Lithia has a different pricing model for their stores based on franchise and the existence of two-tier pricing? Maybe Lithia is more aggressive with price discounts on their CJDR franchises then they are with their Toyota franchises? |
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