Lithia Motors Inc. (LAD - Free Report) announced the acquisition of Honolulu Buick GMC Cadillac and Honolulu Volkswagen stores in Honolulu, Hawaii. The stores are expected to generate $75 million additional revenues annually.
This is the second acquisition by Lithia in Hawaii in the last 60 days. The company at present has 3 stores in the state. The company intends to achieve economies of scale through increased stores in the region.
Lithia acquired the Island Honda of Kahului in Hawaii on Feb 4, 2014. The store, which was the company’s first acquisition in Maui, is expected to add $30 million in annual revenues.
Lithia is aggressively pursuing store acquisitions to expand its business. On Feb 10, 2014, Lithia took over Hammer Lane Volkswagen in Stockton, Calif. The store will be renamed as Volkswagen of Stockton and is expected to generate $20 million additional revenues annually.
Moreover, in Dec 10, 2013, Lithia announced the acquisition of Diablo Subaru of Walnut Creek, CA. This store is expected to contribute $50 million to annual revenues.
Lithia expects this store to turn out to be the largest Subaru store in the U.S. The strategic location of the store is an advantage. Moreover, Lithia believes that this store will complement the existing stores at Reno, NV and Fresno, CA. With this new acquisition, Lithia now has five Subaru stores.
Lithia Motors is the ninth largest automotive retailer in the U.S. With 98 stores in 12 states, the company offers 28 new vehicle brands along with all brands of used vehicle. Currently, Lithia retains a Zacks Rank #2 (Buy).
Some other automotive retailer stocks worth considering are Asbury Automotive Group, Inc. (ABG - Free Report) , Penske Automotive Group, Inc. (PAG - Free Report) and AutoNation Inc. (AN - Free Report) . All these stocks carry the same Zacks Rank as Lithia.