Lithia & Driveway Expands Southwest Retail Network with New Subaru Deal

Lithia & Driveway Expands Its Retail Network in the Southwest Region

Lithia & Driveway (NYSE: LAD), a prominent player in the automotive retail industry, has made a significant move by acquiring Elk Grove Subaru located in Elk Grove, California. This acquisition marks a strategic step towards strengthening their retail network in the Sacramento area and further expanding their operations in the Southwest region of the United States.

During an announcement made on March 4, 2025, Bryan DeBoer, the President and CEO of Lithia & Driveway, expressed his enthusiasm for the deal, stating, "We are excited to welcome the talented team at Elk Grove Subaru to the Lithia and Driveway family. This addition strengthens our presence in the Southwest region and continues our strategy of expanding our network with high-performing partners like Subaru. We look forward to continuing the store's legacy of building customer loyalty and leveraging our omnichannel capabilities to realize Elk Grove's potential."

The acquisition of Elk Grove Subaru is expected to generate approximately $100 million in annual revenue, contributing to a total of $180 million in annualized revenue acquired by Lithia & Driveway this year. This strategic purchase was funded using existing on-balance sheet capacity, showcasing the company’s solid financial footing as it pursues expansion.

Share Repurchase Authorization Increase

In addition to the acquisition, Lithia & Driveway also announced a substantial increase in its share repurchase authorization. The company's Board of Directors approved a $350 million increase, which brings the total funds available for future repurchases to around $748 million. This year alone, Lithia has repurchased over 197,500 shares at an average price of $361 per share, representing an investment of over $71 million that constitutes 0.75% of the company's outstanding shares. This move not only underscores the company's commitment to returning value to shareholders but also reflects confidence in their long-term growth strategy.

Lithia & Driveway operates as the largest global automotive retailer, providing a wide range of products and services throughout the vehicle ownership lifecycle. Their business model focuses on creating simple, convenient, and transparent experiences for customers through a comprehensive network that includes physical locations and e-commerce platforms. The company's omnichannel strategy aims to enhance customer service, thereby fostering customer loyalty and driving profitable growth in an ever-evolving industry.

Looking Ahead

The acquisition of Elk Grove Subaru and the increase in share repurchase authorization signal a period of growth for Lithia & Driveway as they continue to pursue methods of enhancing their market presence. With a sustained focus on high-performance partners and commitment to customer satisfaction, the company is well-positioned to adapt to market demands and consumer preferences in the automotive industry.

In conclusion, Lithia & Driveway is paving the way for future success by reinforcing its retail network in the Southwest and optimizing shareholder returns. The strategic initiatives in place are designed to ensure sustained growth and reinforce Lithia & Driveway’s status as an industry leader in the automotive retail landscape.