Two of the leading auto dealerships made significant dealership acquisitions this week.
Group 1 Automotive, Inc. on Feb. 26 announced the acquisition of Newport Lexus and Tustin Lexus, two high performing Lexus dealerships in Orange County, CA. That was followed the next day by Lithia & Driveway (L&D) purchasing the Carousel Motor Group, growing their footprint in the North Central Region, Minneapolis-St. Paul, MN.
For Group 1, dealerships are expected to generate $350 million in annual revenues bringing 2024 year-to-date total acquired revenues for Group 1 to $850 million, which follows $1.1 billion of acquired revenues in 2023.
SoCal Expansion
Group 1’s President and CEO Daryl Kenningham stated the company was “thrilled” to expand its Southern California platform with this luxury brand.
“Our strong relationship with Lexus and experience in this market area make this a tremendous addition for Group 1,” said Kenningham in a press statement. “The transaction highlights our commitment to strategic portfolio optimization with growth through larger dealership acquisitions while disposing of smaller, less profitable stores.”
Group 1 owns and operates 200 automotive dealerships, 262 franchises, and 43 collision centers in the United States and the United Kingdom that offer 35 brands of automobiles. The company did not disclose the purchase price for the California dealerships.
The deal comes the same month it purchased five dealerships from RRR Automotive Group in Maryland. The acquisition includes the includes the top two volume Honda dealerships in the state of Maryland as well as Toyota, Hyundai, and Kia new vehicle dealerships, a Toyota Certified pre-owned center; and three collision centers.
Midwest Focus for Lithia & Driveway
While Group 1 made their purchases on the coast, Lithia & Driveway purchase was focused on the Midwest. The acquisition announced on Feb. 26 of Carousel Motor Group is projected to generate more than $900 million in annualized revenue
The group comprises nine stores, both premier luxury and domestic brands, and is in the greater Twin Cities region. Carousel Hudson Ford is one of the largest locations in Wisconsin and LAD’s first Ford store in the state.
L&D officials said this location adds more brand offerings to LAD’s already existing footprint after purchasing Wilde Automotive Group in October 2022.
Regional Expansion
“We are excited to expand into the Twin Cities with Carousel Motor Group and its successful award-winning stores,” said Bryan DeBoer, Lithia & Driveway President and CEO said in a press statement.
“Building out our network in the North Central Region, our least-dense region, allows us to foster long-term customer relationships and provide our omni-channel solutions, offering a full ownership lifecycle to this market.”
These additions bring Lithia & Driveway’s total year-to-date expected annualized revenue acquired to over $5.4 billion. The acquisition was financed using existing on-balance sheet capacity.