Lithia Motors and DCH Auto Group’s Partnership Leads to A New Minority Dealership Investment Initiative

Lithia Motors
Lithia Motors and DCH Auto Group’s Merger

A three-year collaboration between Lithia Motors Inc. and DCH Auto Group has facilitated Lithia Motor’s new initiative into becoming majority investors in dealerships owned by minorities who can use access to enough capital to operate solely on their own. In 2014, DCH Auto Group and Lithia Motors Inc. combined companies to join forces in bringing together Lithia’s mid to small size franchise strategy with DCH’s metropolitan reach. As a result, Shau-Wai Lam, DCH’s founder and a champion for minority business development joined the board of directors.

A Career Dedicated to Minority Business Development

Shau-Wai Lam, a 50-year auto industry veteran, TIME Magazine Dealer of the Year and National Association of Minority Automobile Dealer Lifetime Achievement Award Winner has spent a large part of his career championing minority business development. For years he served on the board of the National Association of Minority Dealers and Toyota-Lexus Minority Owners Dealership Association, and was co-chairperson of the Coalition of Asian American Business Organizations.

Lam and Lithia Team Up Once Again

In February 2017, Lam stepped down from the Lithia Motors Board of Directors and initiated another partnership with Lithia Motors to expand the representation of minority dealers. As a result of Lam’s passion for this cause and Lithia Motor’s shared goals, the two have joined forces to create the Automotive Minority Dealer Academy Program (AMDA). Concerning this new program, both partners have made it known that minority consumers account for 30 percent of new vehicle sales, but only 6 percent of auto dealership owners. Therefore, this program is meant to provide professional development opportunities, address problems frequently faced, and increase the number of minority owned dealerships. In response to the event, Lam promised to utilize the resources and scale of the two companies to ensure minority candidates can become dealership owners and help manufacturers diversify their dealer networks.

The Automotive Minority Dealer Academy and Lithia Motor’s Majority Investments

When the Automotive Minority Dealer Academy was established, Bryan DeBoer, Lithia Motor’s President, and CEO expressed the value of Lam’s mentorship and partnership along with their intentions for the new program:

“We’re grateful for Shau-wai’s service on our board and are excited to develop the AMDA program to increase the diversity of our network while creating ownership opportunities for minorities.” In August 2017, DeBoer and Lam took the program to another level when Lithia began to provide funding to minority-owned dealerships who needed the extra support. With Lam at the helm, minority partners can now become part owners with Lithia Motors. The company will be majority owners at 80 to 95 percent while partners will own 5 to 20 percent. The relationship is mutually beneficial as Lithia can earn a profit as the stores grow and can interact with the dealer’s manufacturer partners.  The whole point is to nurture the development of these dealers with the hope of expanding them into sustainable and viable businesses.

A Catalyst for Change in the Auto Industry

As of 2014, Lithia Motors is the eighth largest automotive retailer in the United States with 101 stores in 12 states. Their scope and resources are sure to further the mission of supporting minority dealers to be successful. Their three-year partnership with DCH Auto Group is the catalyst for a program that not only impacts minority dealers but can also have positive ramifications for the industry. Lithia president, Bryan DeBoer has said that Lithia buys substantial assets that do not perform at their potential but will eventually become strong assets with the right development. With support from the collaboration of DeBoer and Lam, it looks as if the dealers associated with this program will have the resources they need to become successful in the automotive industry.