INSIGHTS BLOG
Trends and perspectives from Empiritas thought leaders
Autonomous Vehicles
The future is bright with self-driving vehicles. However the road to complete autonomy is long and filled with many challenges.
Becoming a Big Data Company
Autobytel and TrueCar are essentially in the same business, providing dealers with sales leads. Their leads do not perform remarkably differently in terms of close rate, yet TrueCar is able to command much higher effective revenue per lead and dramatically outpace Autobytel in market value per attributable sale.
Why Lithia Is Undervalued
On June 15, 2014, Lithia (symbol: LAD) announced the acquisition of DCH Auto Group for $362.5M for $340M in cash and $22.5M in LAD stock. While Lithia has enjoyed a 23% rise in stock price as of June 30th, we believe there is considerably more upside to Lithia stockholders.
DCH brings Lithia scale and brand/geographic diversification. DCH’s 27 dealerships are all located in the two largest automotive markets in the US, NY/NJ (13 dealerships) and Southern California (14 dealerships). The mix of dealerships includes:
Luxury: 2 BMW, 2 Lexus, and 2 Audi
Import: 7 Toyota, 11 Honda/Acura, 1 Nissan, and 1 Kia
Domestic: 1 Chrysler Jeep Dodge Ram
Building Digital Dominance
Most other retail sectors have been transformed by eCommerce resulting in fundamental changes to the consumer experience, retailer capabilities and competitive dynamics. Evidence suggests auto retailing is reaching that tipping point and the key success requirements are becoming more clear.
Why Dealer Groups Exist
The fundamental rationale for groups have evolved over time. Up until now most groups have executed a portfolio or holding group strategy. Other than limited use of shared services, the fundamental business model remains unchanged. eCommerce and the resulting changes in customer behavior create the need and opportunity to realign core operations to cost effectively deliver the experience.