Lithia Motors Acquires Ford Store, Expands In California

Lithia Motors Inc. (NYSE:LAD) recently announced the acquisition of Kemp Ford in Thousand Oaks in California. The automotive retailer will rename the store as DCH Ford of Thousand Oaks. The latest buyout is expected to boost Lithia Motors’ revenues by $65 million annually.

This acquisition marks the third takeover by Lithia Motors on the DCH platform this year. The company believes that this acquisition will complement its existing operations in Southern California. In addition, Lithia Motors considers that the acquisition will further expand its relation with Ford Motor Co. (NYSE:F) and will diversify its brand mix.

Lithia Motors strives to expand its business through acquisitions and store openings. In 2014, the company acquired 35 stores and opened one franchise. In 2015, the company acquired six stores, opened one and added a franchise.

In Jan 2016, Lithia Motors announced the acquisition of Riverside Subaru in Riverside, CA. The company will rename the store as DCH Subaru of Riverside. This store is expected to boost Lithia Motors’ revenues by $45 million per annum. In Feb 2016, Lithia Motors announced the acquisition of Ira Toyota/Scion of Milford, MA. The company will rename the newly acquired store as DCH Toyota/Scion of Milford. This store is likely to contribute $65 million to Lithia Motors’ revenues per annum. In the second quarter of 2016, Lithia Motors completed the acquisition of a GMC Buick franchise in Helena, MT.

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Lithia Motors currently carries a Zacks Rank #3 (Hold).

Stocks that Warrant a Look

Better-ranked automobile stocks include The Goodyear Tire & Rubber Company (NASDAQ:GT) and Gentex Corp. (NASDAQ:GNTX) , both carrying a Zacks Rank #2 (Buy).

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