Lithia Motors, one of the nation’s leading automotive retailers, has finalized its acquisition of Downtown LA Auto Group, marking a significant expansion in the Los Angeles market and adding the prominent Dtla Motors Mercedes dealership to its portfolio. This strategic move, completed in August 2017, further solidifies Lithia’s growth trajectory and presence in key metropolitan areas.
The acquisition, reported to be Lithia’s second major purchase of the year, underscores the company’s aggressive growth strategy. Earlier in May 2017, Lithia acquired six dealerships from the Baierl Group in Pittsburgh, demonstrating a consistent approach to expanding its market reach across diverse geographic locations and brand portfolios. The Downtown LA Auto Group deal, including DTLA Motors Mercedes, significantly boosts Lithia’s annual revenue, adding over $1 billion to its bottom line.
Downtown LA Auto Group’s legacy dates back to 1955, when Nick and Jeanette Shammas established the group with the acquisition of Felix Chevrolet. Facing urban changes and General Motors’ suggestions to relocate, the Shammas family strategically invested in the area surrounding their original Felix Chevrolet location. This decision proved prescient as they developed a thriving commercial property business and expanded their dealership holdings along the 10 Freeway. This area evolved into a bustling “auto row,” contributing to the revitalization of south downtown Los Angeles. By the time of the acquisition, the Los Angeles-based group encompassed six locations and nine brands, including the highly regarded DTLA Motors Mercedes and Sprinter dealership.
The Downtown LA Auto Group’s portfolio included:
- Felix Chevrolet (Notably, this dealership was retained by the Shammas family and was not part of the Lithia acquisition)
- Porsche Downtown LA
- Audi Downtown LA
- Volkswagen Downtown LA
- Downtown LA Motors Mercedes Benz
- Downtown LA Motors Sprinter
- Downtown LA Nissan
- Toyota Downtown LA
- Carson Nissan
Leadership of the Shammas Group transitioned to Darryl Holter, Jeanette Shammas’ son-in-law, after the passing of Nick Shammas in 2003. Jeanette Shammas continued to play an active role as president until her passing in 2014, maintaining the family’s dedication to the business.
Lithia Motors has demonstrated a strong track record of not only strategic acquisitions but also enhancing the performance of acquired dealerships. The company reported record-breaking second-quarter earnings for the 27th consecutive quarter in 2017, exceeding Wall Street expectations for both revenue and earnings. This financial strength is further evidenced by a robust stock price and strategic financial moves, including raising nearly $300 million through senior notes and maintaining substantial liquidity. This financial capacity positions Lithia for continued expansion and further acquisitions in the competitive automotive retail landscape, suggesting that the purchase of groups like Downtown LA Auto Group, featuring DTLA Motors Mercedes, is part of a larger, ongoing growth strategy.
While the Shammas family retained Felix Chevrolet, the acquisition of the remaining Downtown LA Auto Group dealerships by Lithia marks a new chapter for brands like DTLA Motors Mercedes. Kerrigan Advisors acted as the representative for Downtown LA in this significant transaction, adding to their extensive portfolio of dealership sales. This acquisition signifies the ongoing consolidation and evolution within the automotive dealership market, with Lithia Motors playing a leading role in shaping its future.
Reference:
Dealership Buy-Sell Market Plummets — TBR’s 2017 1st Qtr Report
