Lithia Motors continued on its Northern California buying spree, announcing the acquisition of Diablo Subaru of Walnut Creek in the East Bay Area.
"The Bay Area is the highest import penetration market in the country and has the lowest domestic penetration in the country," said Bryan DeBoer, Lithia president and chief executive officer.
The Medford auto retailer bought the store from a family trust. It is not far from Lithia's former Concord Ford and Dodge dealerships sold four years ago.
"The difference is that we're getting one of the most attractive brands as opposed to a market where consumers are not attracted to domestic brands," DeBoer said. "I don't know the reason why, but it's been that way for decades."
The store adds $50 million in estimated annual revenue to Lithia, which has reported more than $1 billion the past two quarters. The nation's ninth-largest auto retailer, Lithia now has 94 stores in 11 states. Prior to the recession, it had as many as 110 stores and 6,200 employees. The 50-person staff in Walnut Creek pushes the company's head count to 5,500.
DeBoer said the Walnut Creek dealership not only is one of the most desirable locations, but has the potential to be among the highest-volume Subaru shops in the country.
"It had all the right elements, and made sense financially," DeBoer said. "The logistics to get there and familiarity with the market."
Lithia operates Subaru dealerships in Fresno, Calif., and Reno, Nev., where it is the third-largest seller of the import brand in the country, pushing 2,500 new units annually. By comparison, the largest Subaru dealer in the country is in Colorado Springs, which sells 3,500 annually.
"The Walnut Creek store has the potential to be bigger than Reno, because we're in a market with 1.2 million people," DeBoer said. "The East Bay has a lot of people who are into outdoor activity, going to Squaw Lake or Lake Tahoe, mountain bikers and skiers. It fits perfectly for us."
— Greg Stiles