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.
Browse all interviews →
Transcript (9 segments)
B
Bryan Osterhout0:00
We've been able to balance the shortages in new cars with very robust used car sales. We have almost 18,000 cars on our driveways and Lithia websites in used cars, and we're up 40% in revenue on a same-store basis in the quarter.
I
Interviewer0:17
Does that exposure to used cars hedge your exposure to new cars during the chip shortage? Is it nonetheless something that you expect and hope will abate because the margins are better on new car sales?
B
Bryan Osterhout0:31
Well, margins are pretty strong right now on both segments. I think most importantly, the ability to have both used and new cars in our stores and online does give us the ability to provide optionality to our consumers, which allows flexibility in our profitability and really realize those benefits across the company.
I
Interviewer0:54
What are you hearing from the automakers on the chip shortage? Do you think we're past the worst of it, or is it going to get worse before it gets better?
B
Bryan Osterhout1:00
It's definitely a mixed bag. It appears like we've troughed in a number of manufacturers that we have seen the worst of it, sitting around 20 days supply in some of those. I do believe though that because demand is so robust out there, it's probably going to take into the middle of next year before things really recover to a more normal level.
I
Interviewer1:23
With Driveway, your buy-and-sell online service, do you see that as a hedge against the changing nature of retail and the changing nature of your industry and specifically allow you to have a hedge against the dealership business if that declines?
B
Bryan Osterhout1:41
That's fair. When we think about optionality for the consumers, what Driveway does is it allows them to have the convenience of in-home delivery as well as the transparency and empowerment of being in control of their own environment online to be able to do that. On top of that, our traditional businesses in Lithia, our e-commerce business, is almost 25% of our sales, almost $5.5 billion annualized, so it's a pretty good part of our normal business, having our 300 local and regional brands as well.
I
Interviewer2:13
On the flip side, I know you are buying more dealerships. Is that more a geographic expansion play?
B
Bryan Osterhout2:20
It is. We've defined our country as six specific regions where we specifically target to achieve density in our region of about 100 miles from all customers in the country. We've done a good job on that in four of our six regions. We've grown at, we've now purchased over $10 billion in revenue in the last 15 months and grown the company almost 60% in total revenue base, expanding that density from about a 500-mile average reach down to about 225-mile reach.
