Question · Q3 2025
Mark David Jordan asked about the specific drivers of value creation when Lithia integrates a newly acquired dealership into its system, beyond just the acquisition price.
Answer
Bryan DeBoer, President and CEO, explained that value creation typically results in a 2-3x lift in net profitability. Approximately 25% comes from immediate scale synergies like lower interest rates and consolidated vendor contracts. The other key drivers are used vehicles, where acquired stores shift from selling mostly same-brand used cars to a 60% conquest mix, and after-sales, by focusing on post-warranty service and non-OEM parts to retain customers. He also noted that the Driveway platform's ability to attract 10 million eyeballs to an average car, compared to 10,000 for an individual dealership, enhances pricing power.