Boston Partners cut its position in shares of Lithia Motors, Inc. (NYSE:LAD – Free Report) by 6.4% during the 2nd quarter, according to the company in its most recent Form 13F filing with the SEC. The fund owned 45,617 shares of the company’s stock after selling 3,099 shares during the quarter. Boston Partners owned approximately 0.18% of Lithia Motors worth $15,408,000 as of its most recent SEC filing. Get Lithia Motors alerts: Other large investors also recently added to or reduced their stakes in the co ...

Core Insights - New vehicle sales remained strong in Q3 2025, driven by electric vehicle (EV) sales, but affordability issues and the expiration of EV tax credits may impact future demand [1][4] - The Federal Reserve's rate cuts are expected to gradually lower auto financing costs, providing relief to buyers and retailers [1][5] - Leading players are leveraging digitization, strategic acquisitions, cost management, and shareholder-friendly actions to maintain competitiveness [1][6][7][8] Industry Overview - The auto retail and wholesale industry is crucial for delivering vehicles and parts to consumers, operating through dealership networks and retail chains [3] - Economic conditions significantly influence the industry's performance, with consumer spending on vehicles typically increasing during economic upturns and declining during downturns [3] - The COVID-19 pandemic accelerated the industry's shift towards online tools and e-commerce, a trend expected to continue [3] Key Themes - Vehicle sales are anticipated to soften as EV demand cools and affordability issues persist, with average vehicle prices exceeding $50,000 [4][5] - The Federal Reserve's interest rate cuts may help lower auto loan costs, potentially bringing buyers back into the market [5] - Auto retailers are pursuing strategic acquisitions to expand their market reach and improve operational efficiency [6] Digitization and Customer Experience - Dealers are investing in digital platforms to enhance the buying experience, which is crucial for maintaining competitiveness in a tech-savvy market [7] - The shift towards digitization is expected to broaden customer reach and improve margins [7] Investor-Friendly Actions - Several auto retailers are committed to rewarding shareholders through buybacks and dividend increases, supported by healthy cash flow from acquisitions and cost-efficiency programs [8] Industry Performance - The Zacks Auto Retail & Wholesale industry ranks 18, placing it in the top 7% of around 245 Zacks industries, indicating positive near-term prospects [9][10] - The industry has underperformed the S&P 500 and the broader Auto, Tires, and Truck sector over the past year, returning 8.2% compared to the S&P 500's 14.7% and the sector's 40.8% [12] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 8.5X, significantly lower than the S&P 500's 18.12X and the sector's 22.41X [15] - Historical trading ranges for the industry have been between 4.78X and 10.79X over the past five years [16] Company Highlights - Asbury Automotive is expanding rapidly through acquisitions and digital innovation, with a projected annualized sales increase of around $3 billion from recent deals [19][20] - Sonic Automotive's balanced business model supports steady profitability, with significant growth expected from its EchoPark used car segment [23][24] - Penske Automotive is expanding its global footprint and maintaining a strong balance sheet, with a low debt-to-capital ratio of 14% [27][28][29] - AutoNation is enhancing its digital capabilities and expanding through acquisitions, with a focus on strengthening its market presence [32][33]