Lithia Motors (LAD) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Natural disasters, adverse weather conditions, and public health emergencies can disrupt our business
2. 02Increasing competition among automotive retailers reduces our profit margins on vehicle sales and related businesses. Further, the use of the Internet, e-commerce, and digital technology in the car purchasing process could materially adversely affect us
3. 03Our F&I business and other related businesses, which have higher margins than sales of new and used vehicles, are subject to strong competition from various financial institutions and others
4. 04Changes to the automotive industry and consumer views on car ownership could materially adversely affect our business, results of operations, financial condition, and cash flows
5. 05We compete in a dynamic industry, and we may invest significant resources to pursue strategies, develop new offerings, and enter into adjacent businesses that do not prove effective
6. 06A decline of affordable and available vehicle financing may adversely affect our vehicle sales
7. 07Adverse conditions affecting one or more key manufacturers may negatively affect our business, results of operations, financial condition, and cash flows
8. 08materially adversely impacted by a manufacturer’s or distributor’s inability to supply our stores with an adequate supply of vehicles
9. 09If manufacturers or distributors discontinue or change sales incentives, warranties, and other promotional programs, our business, results of operations, financial condition, and cash flows may be materially adversely affected
10. 10The ability of our stores to make new vehicle sales depends in large part upon the franchise agreements with manufacturers and, therefore, any disruption or change in our relationships could impact our business
11. 11Changes to manufacturer distribution models may disrupt the way we do business and impact our revenues and profitability
12. 12We may experience greater credit losses in DFC’s portfolio of finance receivables than anticipated
13. 13The growth and success of our DFC business is dependent upon obtaining sufficient capital to grow our finance receivable portfolio

Technology and Cybersecurity Risks

1. 14Changes to the retail delivery model and increased e-commerce and omnichannel competition could adversely affect our business, results of operations, financial condition and cash flows

Regulatory Risks

1. 15Our dealerships and our new vehicle sales model may not be protected if state dealer laws are repealed or weakened, a manufacturer becomes bankrupt or there is a shift to other sales models
2. 16Changes to laws or regulatory frameworks applicable to automotive consumer financing transactions could negatively affect our results of operations
3. 17Import product restrictions, currency valuations, U.S. and foreign trade policies and risks may impair our ability to sell foreign vehicles or parts profitably
4. 18Our operations are subject to extensive governmental laws and regulations. If we are found to be in violation of or subject to liabilities under any of these laws, or if new laws or regulations are enacted that adversely affect our operations, our business, operating results, and prospects could suffer
5. 19Our ability to increase revenues and profitability through acquisitions depends on our ability to acquire and successfully integrate new vehicle franchises
6. 20Risks associated with our international operations may negatively affect our business, results of operations and, financial condition
7. 21The loss of key personnel or the failure to attract additional qualified management personnel could adversely affect our operations and growth

Risks Related to Investing in Our Common Stock

1. 22Oregon law and our Restated Articles of Incorporation may impede or discourage a takeover, which could impair the market price of our common stock
2. 23We may not be able to satisfy our debt obligations upon the occurrence of a change in control under our debt instruments
3. 24Our issuance of preferred stock could adversely affect holders of common stock