Lithia enters Alabama with Subaru dealership purchase

Lithia Motors Inc. has entered the state of Alabama, acquiring Koby Subaru in Mobile, as it continues to add dealerships in the Southeast — a key region in its expansion plans and where the retailer has the fewest number of stores.

The nation's second-largest dealership group bought the store July 12 from Roger Koby, according to Haig Partners, a buy-sell firm in Fort Lauderdale, Fla., which represented the seller in the transaction.

Lithia said Tuesday that it has renamed the store Subaru of Mobile. Terms weren't disclosed, but Lithia said it paid for the dealership using existing balance sheet funding.

The retailer said the Koby Subaru acquisition and last month's purchase of Michael's Subaru of Bellevue in Washington combined would add an expected $155 million in annual revenue.

Since July 2020, when Lithia announced its five-year plan to grow to $50 billion in annual revenue, it has purchased dealerships that are expected to generate $8 billion in annual revenue.

"This Southeast expansion — coupled with growth and outstanding performances of our existing stores — has us outpacing our five-year plan," CEO Bryan DeBoer said in a statement.

In June, Lithia said it had entered Mississippi, buying Herrin-Gear Toyota in Jackson.

Lithia, of Medford, Ore., ranked No. 3 on Automotive News' most recent list of the top 150 dealership groups based in the U.S., retailing 171,168 new vehicles in 2020. But Lithia's April acquisition of Michigan's Suburban Collection makes Lithia the second-largest group going forward.