The chief executive of Lithia Motors said the company does not plan to sell Chinese automotive brands in the United States in the near term, citing structural and financial barriers rather than political concerns.
Bryan DeBoer, speaking during the company’s earnings call, said the main obstacles involve investment costs, expected returns and franchise regulations that govern dealership operations in the U.S.
Lithia, the largest automotive retailer in the country, already operates at least 10 stores in the United Kingdom that sell vehicles from three Chinese manufacturers. In the UK, dealership rules allow competing brands to share showroom space under certain conditions, reducing expansion costs.
DeBoer said adding a Chinese brand such as Chery Automobile to an existing UK showroom could cost less than $100,000. In contrast, U.S. franchise laws are stricter, vary by state and often require dedicated facilities, making expansion significantly more expensive.
In the United States, Lithia would likely need to establish new retail outlets and service operations to support Chinese brands. DeBoer noted that about 50% to 60% of the company’s profits come from service and parts, making infrastructure a critical factor.
While Chinese automakers have expanded rapidly overseas, none currently sell vehicles in the U.S. under their own branding. China-produced vehicles are available in America through established names such as Buick and Volvo, but brands like BYD and NIO have yet to enter the U.S. market directly.
Industry analysts note that global market share for Chinese automotive brands has risen sharply over the past five years, intensifying competition worldwide.
DeBoer said Lithia is maintaining relationships with several Chinese manufacturers but does not expect to be an early mover in the U.S. or Canada.
“We’ll keep our minds open and look at the opportunities that present themselves in the future,” he said.
Lithia reported annual revenue growth of 4% and a 3.1% increase in gross profit during its latest financial update.
