Suburban Collection closes sale to national dealership chain Lithia
Suburban Collection closes sale to national dealership chain Lithia
Jackie Charniga, Automotive News
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Lithia Motors Inc. is now the owner of Southeast Michigan s Suburban Collection and 34 of its dealerships in a deal expected to add $2.4 billion in annual revenue.
The sale, first reported in January and which closed Monday, is one of the largest-ever acquisitions for Lithia as well as one of the largest auto-retail transactions of the past decade.
Specific terms of the acquisition were not disclosed.
But Lithia CEO Bryan DeBoer, in an interview, said the price Lithia has paid for recent acquisitions has been equal to 15 percent to 25 percent of a dealership group s annual revenue, and that the Suburban deal fell in the middle of that range. That would make the value of the deal about $500 million. He said the company s net investment includes retail operations, goodwill, some inventory and real estate.
2020 was a challenging year for Subaru, one of the smallest Japanese automakers. But 2021 is starting with new worries for Subaru of America. Subaru Corporation shut down its Japanese plants and the manufacturing facility in Lafayette, Indiana, at the beginning of the year. It s affecting inventory of the 2021 Forester, Outback, and Crosstrek, and other models.
According to a new report from the Automotive News Research & Data Center, Subaru plant shutdowns reduced January output by about 20,200 vehicles because of the recent microchip shortage. AutoForecast Solutions projects this number will increase.
This is problematic for Subaru because another report by Cox Automotive says Subaru of America continues to have the tightest days supply of cars of any automaker in the U.S. in 2021.
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