Lithia’s digital platform, Driveway, to see rapid growth in next five years

While the biggest chunk of Lithia Motors Inc.’s growth strategy is its acquisition ambitions, a strong second is the rapid expansion of its digital platform, Driveway.

By the time Lithia’s five-year plan has played out, CEO Bryan DeBoer projects that Driveway will generate $9 billion in revenue — roughly three-quarters as much as the whole company did in 2019 and 2020 each.

In the drive to build a truly nationwide retail network, the ability to efficiently sell — and buy — vehicles online relieves the need to have a store in every town while also addressing a crucial pain point for consumers who do not enjoy or appreciate traditional auto sales practices. The profits from the online sales, DeBoer said, help fund physical acquisitions.

“The two strategies have to work together,” he said. “Without the infrastructure, Driveway doesn’t work, and without Driveway, we wouldn’t have had the capital to drive shareholder value.”

DeBoer aims to have a dealership within 100 miles of every U.S. consumer. Combined with Driveway, Lithia would then be able serve the entire country and not have to buy more stores to keep growing.

Driveway’s foundation was paved with a series of strategic actions in 2017 and 2018.

In tech-forward Pittsburgh — home to Argo AI and other automated-driving experiments — Lithia acquired Baierl Auto Group in 2017 and added eight Day Automotive dealerships in early 2018.

Then Lithia hired George Hines, a digital commerce executive and former consultant, as its first chief of innovation and technology.