During the first half of the year, Lithia sold 133,694 new vehicles, up 3.6%. AutoNation sold 114,332 vehicles for the same period, down 22%.
AutoNation CEO Mike Manley in a call with analysts Thursday said the decline in new vehicle volume in the second quarter “when you consider our low level of new inventory and high inventory turns , was in my view solely the result of a continued limited supply”. AutoNation did not respond to a request for comment from Automotive News in the race for sales.
Lithia also beat AutoNation so far this year on combined new and used vehicle sales. Lithia retailed 288,409 vehicles in the first half, a 12% gain, while AutoNation sold 271,175 vehicles, a 9.3% decline.
“Pretty good throughput”
The country’s publicly traded dealer groups all saw their sales curtailed due to the shortage of new vehicles, but Lithia and AutoNation saw supply improvements, albeit slight, between late March and late June.
Lithia reported a 32-day supply of new vehicles on June 30, compared to 27 days on March 31.
AutoNation reported an 11-day supply of new vehicles on June 30, compared to just eight days at the end of March.
The supply parameters of the two companies are not comparable, because Lithia’s calculations include vehicles in transit.
“Our servant [brands] the daily supply on the nine is around 60 days, so we have pretty good flow even though there are transits on that,” Lithia CEO Bryan DeBoer said in a call Wednesday. with analysts. really sell every car we get as fast as we can get them, is in our imports, which we sit at a 16 day supply. Our luxuries sit at around 29 days supply.”
He estimated that a third of Lithia’s new vehicle volume is pre-sold, up from about half 90 days ago.
“Since interest rates have gone up, that’s certainly affected things, but it’s…still a robust environment where these cars are hitting the ground and it’s somebody who wants to drive the car and there’s has two other people waiting to drive the same car,” DeBoer said. “It’s still a bit frantic, and we imagine that will continue throughout the year, especially knowing that most manufacturers’ supply lines are going to remain quite tight until the first or second quarter of next year.”
AutoNation Chief Financial Officer Joe Lower said on the call with company analysts that the retailer expects “demand will continue to outstrip supply in the second half of 2022.”
He noted that 35-40% of national brand vehicles are pre-ordered today, up from about half in the first quarter. Half of import-brand vehicles are pre-ordered, the same percentage as in the first quarter, he said, and AutoNation’s luxury-brand pre-order rate fell slightly to 60-65 percent today. today, compared to 70% in the first quarter. Still, all pre-orders are “significantly above” levels they were at before the coronavirus pandemic began, Lower said.
The Lithia shopping spree
Lithia overtook Penske Automotive Group Inc.’s longtime No. 2 in new-vehicle sales last year as it continued an acquisition tear. Lithia purchased the 34-store Michigan Suburban Collection in April 2021, its largest of several purchases in the past year. And the retailer continued to acquire dealerships at a rapid pace in 2022.
Earlier this month, Lithia, of Medford, Oregon, purchased a Ford store in Northern California. At the end of June, Lithia acquired 10 dealerships in three transactions in South Florida and Nevada. In the first quarter, Lithia purchased six dealerships in Northern California and Las Vegas in two transactions. Lithia also lost a few stores this year.
AutoNation, of Fort Lauderdale, Fla., acquired 20 franchise dealerships in 2021 in two major transactions. The company, which hasn’t reported any dealership acquisitions so far in 2022, is using some of its capital to expand its AutoNation USA used-vehicle standalone business from 11 stores today to more than 130 planned to by the end of 2026.
Melissa Burden contributed to this report.