Lithia sells their first dealership since reorganization

[XDCX]

Lithia reported that they have sold their Issaquah Chevrolet dealership - the first sale of a dealership since the company announced their reorganization plan two months ago.

Lithia has indicated that part of their reorganization will involve the sale of 10 - 15 under-performing dealerships.

While the sale of the dealership is noteworthy, I was most interested to learn that the buyers already own two Toyota Dealerships in the area. Is their interest in the store related to the value of the Chevrolet franchise, or are they more interested in obtaining a location for a future Toyota store? (There is no Toyota Dealership in the Issaquah market)

Here's a link to the news report that provides information about the buyers: http://www.foxbusiness.com/story/mar...sale-issaquah/

[WillSD]

In the great Midwest, Lithia has apparently contracted to sell their two Sioux Falls, South Dakota stores (Chevrolet & Dodge) to the Billion Automotive Group. Lithia Chevrolet was formerly Terry Schulte Chevrolet and still operates out of the existing facilities. Lithia Dodge was formerly Tufty Dodge and recently moved to new digs in SW Sioux Falls.

Billion has the Buick, GMC, Chrysler, Jeep, Toyota, Scion, Nissan, Mazda, Hyundai and Kia stores in Sioux Falls. Just a few miles south of Sioux Falls at the Worthing exit, they have Chevrolet, Buick and Pontiac. 40 miles west of Sioux Falls in Salem, they have Chevrolet, Chrysler, Dodge and Jeep. It will be interesting to see how the outlying stores shake out.

[oldschool]

Toyota store in Vacaville is losing thier service manager after many years.

[XDCX]

Originally Posted by WillSD

In the great Midwest, Lithia has apparently contracted to sell their two Sioux Falls, South Dakota stores (Chevrolet & Dodge) to the Billion Automotive Group. Lithia Chevrolet was formerly Terry Schulte Chevrolet and still operates out of the existing facilities. Lithia Dodge was formerly Tufty Dodge and recently moved to new digs in SW Sioux Falls.

Billion has the Buick, GMC, Chrysler, Jeep, Toyota, Scion, Nissan, Mazda, Hyundai and Kia stores in Sioux Falls. Just a few miles south of Sioux Falls at the Worthing exit, they have Chevrolet, Buick and Pontiac. 40 miles west of Sioux Falls in Salem, they have Chevrolet, Chrysler, Dodge and Jeep. It will be interesting to see how the outlying stores shake out.

Thanks for the information.

I haven't read anything from Lithia about the sale of those stores - maybe they're still finalizing the details?

To the extent that Wall Street wants Lithia to have less exposure to domestic stores, selling these dealerships may make sense.

[XDCX]

Originally Posted by oldschool

Toyota store in Vacaville is losing thier service manager after many years.

I always hate to hear about departures of long-time employees.

I don't know if his/her departure was the result of Lithia's downsizing, but I image that the whole organization is impacted by the uncertainty about the Lithia's future.

Hopefully Lithia will be able to sell off the 10 - 15 stores in short order so the company can get back to normal operations and their employees won't have to worry about the possibility that their store is going to be sold off.

[XDCX]

Recent reports in the media indicated that Lithia recently sold their Chrysler Dealership in Burlingame, CA.

I would have to guess that this was one of the poorest performing stores in the Lithia Group. The location, the facility and the local demographics made that store very challenging.

It will be interesting to see how the new owners do.

[XDCX]

News reports indicate that Lithia will be closing their Chrysler, Jeep, Dodge Dealership in Ukiah and their Dodge Dealership in Fairfield.

Here's a link to the news report: http://www.ukiahdailyjournal.com/ci_10484975

Interestingly, the General Manager of the Ukiah store indicated that he was in negotiations with Lithia to see if the store could be purchased and converted back to private ownership.

My guess is that it would be difficult to do at this point in time but it's an interesting option for any of the other stores that Lithia is interested in selling.

Are there any other stores that are currently in the process of being sold or closed?

[XDCX]

News reports indicate that Lithia has closed their Suzuki Dealership in Sparks, NV and moved the franchise to their Lincoln, Mercury, Isuzu, Audi Dealership in Reno.

Here's a link to the news report: http://www.rgj.com/apps/pbcs.dll/art...809160317/1021

Given that Isuzu is a dead franchise, moving the Suzuki store may make good sense. That said, having Suzuki, Audi and Lincoln, Mercury under the same roof must be a real challenge for the New Car Manager and the Service Manager.

I've noticed that Suzuki seems to be having a tough time - that surprises me given the current price of gas. There must be some other reason that dealers are deciding to close/consolidate their Suzuki operations.

[XDCX]

As I've stated before I try to keep some distance from the Yahoo Message Boards because so many of their threads become childish attacks with people taking cheap shots against their current or former employer.

There was, however, a good post on Lithia's Message Board today. It appears to be a letter from Bryan DeBoer to the Lithia employees that reviews the changes the company has made to increase profitability.

While no one likes to read about a company that has to close stores, I thought the letter showed that Medford is making the hard decisions necessary to survive this storm.

Here's a link to the post on the Yahoo Message Board: http://messages.finance.yahoo.com/St...=1&frt=1&off=1

[XDCX]

Here's another news report on the closing of the two Lithia Dealerships in Northern California: http://www.pressdemocrat.com/article...shutting_doors

While most of the news is just a re-hash of the earlier report, I was surprised to read that Lithia had purchased the Ukiah store only two years ago. Although Chrysler, Jeep, Dodge was a hot franchise in the late 1990s, that wasn't the case just two years ago.

I was also surprised that they didn't do some type of "Project Genesis" deal with the Chrysler/Jeep dealer in Fairfield. I'm sure that there must be a reason why, but it would only be speculation on my part.

[XDCX]

A newspaper report indicates that Lithia has entered into an agreement to sell their Chrysler/Dodge dealership in Wenatchee.

Here's a link to the news report: http://wenatcheeworld.com/apps/pbcs....710029998/1001

It's interesting to note that similar to their sale of Issaquah Chevrolet, it's a Toyota Dealer that's stepping up to make the purchase.

[XDCX]

Originally Posted by WillSD

In the great Midwest, Lithia has apparently contracted to sell their two Sioux Falls, South Dakota stores (Chevrolet & Dodge) to the Billion Automotive Group. Lithia Chevrolet was formerly Terry Schulte Chevrolet and still operates out of the existing facilities. Lithia Dodge was formerly Tufty Dodge and recently moved to new digs in SW Sioux Falls.

Billion has the Buick, GMC, Chrysler, Jeep, Toyota, Scion, Nissan, Mazda, Hyundai and Kia stores in Sioux Falls. Just a few miles south of Sioux Falls at the Worthing exit, they have Chevrolet, Buick and Pontiac. 40 miles west of Sioux Falls in Salem, they have Chevrolet, Chrysler, Dodge and Jeep. It will be interesting to see how the outlying stores shake out.

WillSD - Great post - your information was 100% accurate.

Lithia announced yesterday that they have now completed six store divestitures. They had originally planned to divest 14 dealerships but expanded the number to 16 when they were approached with an unsolicited offer.

Based on yesterday's Press Release and the information they shared during the Second Quarter Conference Call, it would appear that there are 10 more stores that will be sold or closed. (Only nine when you factor that the sale of the Wenatchee Chrysler/Dodge store has not been announced yet.)

[XDCX]

News reports indicate that Lithia has sold their L2 Facility in Hiawatha for an undisclosed sum.

Like many of the other Lithia dispositions, it was a Toyota dealer that stepped up and purchased the facility.

The news report indicated that the L2 Facility was only open for about six months before it was closed. Lithia consolidated the L2 operations into their nearby Kia location.

Here's a link to the news report: http://www.gazetteonline.com/apps/pb.../1007/business

[XDCX]

News reports indicate that Lithia will close their Ford Dealership in Omaha on December 16th - 56 people will be laid off.

Here's a copy of the news report: http://www.tradingmarkets.com/.site/...0News/1952460/

Apparently in some markets employers are required to notify the local government if more than 50 people will be impacted as a result of a business closure.

It surprises me that Lithia could find a buyer for their C/J/D Dealership in Burlingame, CA but couldn't find a buyer for their Ford Dealership in Omaha. I always figured that the Burlingame Chrysler store had to have been one of their most "toxic" locations.