Bryan Osterhout on e-commerce
From Lithia Motors CEO says chip shortage a 'mixed bag' · · CNBC Television
“Driveway allows consumers the convenience of in-home delivery as well as the transparency and empowerment of being in control of their own environment online, which provides optionality for consumers and hedges against changes in the dealership business.”
On , Bryan Osterhout, Regional President at LITHIA MOTORS INC -CL A, spoke about e-commerce during Lithia Motors CEO says chip shortage a 'mixed bag' on CNBC Television.
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.