LAD - Lithia Motors And Group One Automotive Look Attractive At Current Levels.
Lithia Motors and Group One Automotive Have Similar Business Models
The dealership business is the only segment that is low to moderately cyclical across the entire automotive supply chain. Large franchise dealers like Group One Automotive (GPI) and Lithia Motors (LAD) benefit from cost economies, centralized back-office and intangible advantages like customer retention, regulation and technology. In addition, Lithia and Group One are actively acquiring smaller independent dealers, aiding them to benefit from the consolidation. Although dealership is a low margin business, on average, 50%-65% of LAD and GPI margin is