About Bryan Osterhout
Bryan Osterhout, Regional President at Lithia Motors, has discussed the company's strategies for navigating the automotive market. In 2022, he described the semiconductor chip shortage as a "mixed bag," noting that while some manufacturers had seen the worst of it with around 20 days of supply, robust demand meant recovery to normal levels would likely take into the middle of the following year. He stated that Lithia balanced new car shortages with strong used car sales, reporting a 40% increase in same-store revenue for used cars and highlighting that margins were strong on both new and used segments. Osterhout also emphasized the company's e-commerce platform, Driveway, which he said offers in-home delivery and a seven-day return policy on used vehicles, with plans to extend that policy to new vehicles in early 2022. He noted that Lithia's e-commerce business accounted for nearly 25% of sales, or about $5.5 billion annualized, and that the company had purchased over $10 billion in revenue in the previous 15 months to increase regional density.
In earlier appearances from 2012 and 2013, Osterhout focused on the impact of the internet on dealership operations. He stated that general managers needed to either learn internet skills or hire someone who could, as stores that performed well online were consistently successful. He argued that the internet expanded the sales area for used cars from about 50 miles to 200 or 250 miles, and that used car buyers were often "predisposed" to specific vehicles, traveling long distances to purchase them. Osterhout also stressed the importance of customer retention, saying that retaining only 40% of sales customers into the service department indicated poor performance, and that efforts should be made to keep customers engaged for future sales. He described mobile technology as "the next evolution" but noted that the company was first focused on improving its internet processes.
Source: AI-verified profile updated from Bryan Osterhout's recent appearances.
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Transcript (6 segments)
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Interviewer0:00
Okay, so Brian, your company people may not know you, but you're the number four company in the S&P Direct for a 10-year total shareholder return. How does the number four company get there, and how come most people don't know you?
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Bryan Osterhout0:17
We stay humble. We keep our head down and focus on our consumers. When you do that, it's very clear that you're a kind of a 360 company. You are a company that drives the car to you, takes it back from you, all these things that we hear that allegedly Carvana has invented, you've been doing for a long time. And yet your market cap is about almost a fifth of theirs. I'm confused. Lithia's got a plan to take over the world. Why can't you go head-to-head against Carvana and get some more market cap?
Well, someday we hope to. We're in the forefront of being able to roll out our Driveway strategy, which is an e-commerce solution that provides in-home service, body parts work, as well as vehicles directly in consumers' homes, which is absolutely wonderful. In fact, we got a simple little line that we say is you can have your car serviced in your slippers. And most importantly, over the next two years, we'll be rolling that out market by market in the country, whereas you can actually never set foot in a dealership again if you so choose to.
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Interviewer1:24
No, wait, Brian. I bought a car using Carvana. I bought it online, it came, I didn't like it, they took it back. They said they were the only people in the country to do that. Is that wrong?
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Bryan Osterhout1:37
Well, with Driveway, now there's 20,000 vehicles online, all used at the current time. We have a seven-day return policy, no questions asked, as well. And come Q1 of next year, we're going to have another 20 to 30,000 new vehicles online and will be the first to be able to provide a seven-day, no-questions-asked return policy as well on new vehicles.
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Interviewer2:00
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