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Lithia Motors

One of the largest automobile retail groups in the United States, Lithia Motors, has worked its way up the ranks and currently competes among the Fortune 500 companies with a mammoth 206 stores across 22 states. This automobile retail giant is not just into selling automobiles but offers several other services such as financing, vehicle protection subscriptions, aftermarket automotive products, collision repair services, and replacement parts.

Products and Services Mix to Success

Everyone loves cars! The company currently sells more than 33 brands of new domestic and imported vehicles and all brands of used trucks and vehicles at over 200 store locations across 95% of the United States. Moreover, their in-network inventory boasts more than 50,000 vehicles.

Lithia Motors has expanded its consumer channels with the newest e-commerce venture, Driveway, which provides customers with a shop-from-home, vehicle-ownership experience. Two years in the making, Driveway’s design aims to give the users a one-price, seamless experience for vehicle buying, selling, trade-ins, and services, from the comfort of their own homes!

The establishment has supported the initiative of a Green Earth by launching GreenCars.com for sustainable vehicles. This initiative educates the consumer on electric vehicles and their advantages. The website also offers the most extensive online inventory for the purchase of green, environmentally-friendly vehicles.

The inspiration that led to the company's inception

With his hard work and friendly reputation, Walt DeBoer successfully opened the first Lithia Motors dealership in Ashland in 1946.

Walt was succeeded by his oldest son, Sidney (Sid), who, when he took over the reins, doubted his ability to run the business alone, but persevered and sold 35 cars in the first month. Uplifted by this confidence, he embraced all the challenges and tribulations that followed, and the rest is history.

In 1996, Lithia Motors, Inc. had expanded to six dealerships in southern Oregon and employed more than 200 residents. The management decided to go public with the company with $146 million in annual revenues at the time. Sid’s goal for going public was to provide growth opportunities to his employees and store leaders and to expand the business to other states.

In 2012, the third generation of the DeBoers, Bryan, succeeded Sid as the CEO and President and continued Lithia Motors’ legacy. Lithia’s story emphasizes and teaches that one’s response to setbacks shapes the future. Bryan has guided the company to Fortune 500 status during his impressive tenure, including #252 in 2020, #4 10-Year Total Shareholder Return, and #6 Ten-year EPS Growth. These achievements result from the company’s growth from $2.7 billion to a whopping $13 billion.

In November 2020, Lithia Motors acquired Sterling Luxury Group (Sterling Motorcars) in Loudoun County, Virginia, which is among the most affluent counties in the United States. This acquisition added three new brands to its portfolio and includes BMW, Mini, Rolls-Royce Motor Cars, Lamborghini, and McLaren. These additions further increase our brand selection and broadest national network in the industry.

Companies are rated 'Admired' based on their Public Relations

Lithia Motors relies heavily on relationships—with its clients, employees, vendors, and local communities. The company understands the importance of connection, communication, and commitment in every aspect of its operations and has always tried to be a step ahead in this direction.

The organization is a notch above its competitors with the unique and compelling combination of its vision to offer personal transportation solutions and a mission of ‘Growth powered by people,’ which keeps them focused on customers, teams, and community welfare.

Five factors that have contributed to Lithia's success

1. The Team

The company owes its success to its employees. From the service technicians to the vice presidents, the company would not have grown without each individual’s dedication and efforts to satisfy its customers. The company places a high degree of value on every employee’s professional growth.  The company offers in-house professional development training, goal setting through annual operating plans, promoting higher education with tuition reimbursement programs, and many such benefits for its employee’s professional growth. It offers robust benefits packages and rewards achievers who motivate the teams and serve the customer.

The workforce mirrors the communities where one lives and does business. The company understands this and engages in activities that empower communities. It prioritizes data interpretation practices throughout the employee life cycle to ensure that they achieve their highest potential.

2. Leadership

The leadership team works dynamically to craft unique, irreplaceable, high-growth strategies to earn a meaningful portion of America’s retail market share. As the company continues to grow, its leaders understand the importance of decentralized decision making that comes with scale, and store leaders are provided the autonomy to make decisions at the local level.

Every team member is encouraged to foster an entrepreneurial spirit and take personal ownership of their actions. Local leaders of the company know their community, customers, and employees and are always thankful for their contribution. With strong and humble leadership, the company continues to gain a loyal customer base.

3. Customer focus

The team proactively engages with customers and takes necessary actions to prioritize and escalate. The company strives to achieve its vision of creating unique transportation solutions by promoting incremental creativity and variation in operating models to serve each customer’s needs. The environment thus inspires all to make better decisions for the customers and the company.

4. Continuous improvement

One of Lithia’s core values is to improve continuously, a value that cannot be overemphasized. In a large sense, Lithia’s success is tied to its teams’ success and customer satisfaction.

Lithia’s excellent proprietary performance management system provides transparency into everyone’s results. The data from the Store Performance Scorecards (SPSs) is used to build trust and weave the four core values into the organization’s framework. Every conversation between the leadership and team focuses on objectives, core value actions, and performance, removing the subjectivity in the employer-employee relationship and strengthening communication.

The SPS contains both long-term and near-term business objectives for each store, allowing employees to take personal ownership by reviewing and understanding the progress autonomously. The SPS enables everyone to view which department is leading, serving as a scorecard for healthy internal competition and motivates an enthusiastic atmosphere to serve more customers.

5. Humility

Lithia Motors was once just a lone auto dealership in a small rural town in southern Oregon. The company’s founders, the DeBoers, value customers and relationships. Its humble beginning set the stage for the company’s growth and success. In response to how Lithia Motors became the number four company in the S&P for a 10-year total shareholder return, Bryan said, “We stay humble. We keep our heads down. And we focus on our consumers.”

Lithia's Core Values

1. Earn customers for life

The company aims to make every customer feel welcomed, respected, and cared for. Every employee at Lithia creates a welcoming and highly responsive environment that drives the business forward and lays grounds for the loyal customer base it can genuinely boast about in its PR. The team believes strongly in meeting the customer’s requirements and preferences and is always willing to go that extra mile for customer satisfaction. Lithia is continuously reaching out to more people via physical and digital platforms to aid in this mission.

2. Take personal ownership

Like any professional corporate organization, the team at Lithia takes personal ownership of every action and result thereof. The organization heavily attributes its success to its local entrepreneurial leadership model successfully implemented across its stores in America. By taking personal responsibility and keeping in line with its vision and mission, the team tries its best to promptly resolve issues and bottlenecks. Leadership teams are motivated to share their views to make the company more robust and resilient.

3. Improve constantly

Lithia Motors’ culture promotes participation and encourages every team member to challenge themselves to outperform benchmarks as a part of their continuous improvement process. The company aims for customer convenience, championing diversity and inclusion, promoting environmental sustainability, and engaging with community service. Every step is dedicated to growing individually and serving the customers better, thus naturally adding to the company’s growth.

4. Have fun

Positivity, passion, and purpose are the holy trinities to ensure that employees enjoy what they do. The company’s enthusiasm to serve its customers and community results in innumerable creative opportunities at work, such as setting up fun and exciting local marketing campaigns and social engagement programs with communities.

Ten of its stores have been recognized as the Best Dealerships to Work For in 2020 by Automotive News. This annual list is a survey and recognition program dedicated to finding and recognizing the best employers in the U.S. retail automobile industry.

Coping with the pandemic

Lithia Motors was deemed an essential service during the lockdown in many states for its car dealerships. Its decentralized business model allowed it to give managers the freedom to operate according to the pandemic conditions in each of its markets.

Before the pandemic, Lithia Motors had initiated the process of adopting videoconferencing to communicate more easily with its nationwide workforce. Virtual meetings and work-from-home have been embraced wholeheartedly. “The pandemic has accelerated this use of technology,” says Tina Miller, CFO at Lithia Motors.

Every store now offers free vehicle pickup and delivery, with surface sanitation. Besides, every store has adopted the practice of virtual or private test drives and payment relief options. Sanitizing gel and foam stations are available along with curbside pickup to reduce in-person interactions. Lithia follows every state’s COVID-19 safety guidelines.

The company has done its part to help those in need by donating meals, food, and other supplies to those affected by the pandemic.

Hurdles along the way

Like the rest of the country, Lithia Motors was hit hard by the financial crisis of 2008. The struggles of adapting to a changing market scenario and growing demand for a better customer experience further added to the problem. Auto sales began a downward spin when there was a sudden limiting in credit markets, which are a key to financing vehicles. Across the country, dealers struggled with bankruptcy and closure of the business.

To survive, grow and thrive, Lithia Motors adopted a new leadership style, allowing local managers more independence. This helped them respond to the real-time issues faced by the management, local consumers, and the community. This new change soon became a permanent fixture in the company and drove its mission of ‘Growth powered by people.’

The 5-Year goal and Future Outlook

The company aims to consolidate and grow faster in keeping pace with the growth of the automobile retail sector in the United States. The 5-year plan includes 200-plus acquisitions and $50 billion in total revenue. The company plans to address the consumer-vehicle-ownership cycle with its Driveway program to continue achieving brand loyalty. By continuing its purchase of strong businesses, the organization plans to increase its network density, leverage its national at-home Driveway brand experience, and build up its regenerating capital engine.

A Word of Advice for all the emerging companies and entrepreneurs, people matter most. Every company’s culture should encourage its team to take risks and continually improve their systems and processes. This enables its performance improvement at every level and accelerates growth and profits.

Bryan_DeBoer

Bryan DeBoer

CEO and President

In the Driver’s Seat

Lithia Motors' Chief Executive Officer (CEO) and President, Bryan DeBoer, hails from the third generation of the DeBoer family. He is the grandson of Walt DeBoer, who founded the retail automobile giant in Ashland, Oregon, in 1946. Bryan joined the business in 1989, working his way up from store managerial positions to finance manager, multi-store general manager, Senior Vice President of Mergers and Acquisitions/Operations, followed by COO, growing the organization and transforming it with an entrepreneurial performance model.

In 2008, he became a Director, and in 2012, he succeeded his father, Sidney DeBoer, as the CEO and President of Lithia Motors. Bryan DeBoer graduated from Southern Oregon University with the highest honors and a B.S. in Business Administration, Summa Cum Laude, and graduated from the National Automobile Dealers Association Dealer Academy and transformed the company's growth and culture with his excellent skills.