Asbury Automotive posted 13% revenue growth in Q3, outpacing AutoNation’s 6.9% and Lithia’s 4.9%.
Asbury’s Tekion platform reduced service advisor training time from five days to one day during pilot testing.
Asbury trades at 8x P/E despite faster growth than AutoNation (12x P/E) and Lithia (10x P/E).
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The automotive retail industry is undergoing a digital transformation, with dealership groups racing to modernize operations through cloud-based platforms. Asbury Automotive Group (NYSE: ABG), AutoNation (NYSE: AN), and Lithia Motors (NYSE: LAD) are all betting on technology to drive efficiency, but the data reveals one clear leader.
Asbury Automotive operates 175 new vehicle dealerships and 39 collision centers, generating $4.80 billion in revenue during Q3 2025. The company is rolling out Tekion’s cloud-based dealership management system across its entire network. CEO David Hult emphasized this strategic focus during the recent earnings call, noting the platform expansion to all Baltimore-DC market stores marked an important milestone.
AutoNation is the largest automotive retailer in the United States, with $27.92 billion in trailing twelve-month revenue. The Fort Lauderdale-based company operates a vast dealership network across various automotive brands. AutoNation has invested heavily in digital retail innovations and omnichannel platforms, enabling customers to complete approximately 80% of the car-buying process online.
Lithia Motors is the second-largest automotive retailer with $37.61 billion in revenue. The Medford, Oregon-based company has pursued aggressive acquisitions while building its Driveway digital platform. Lithia averaged 1.3 million unique visitors per month to its platform during Q2 2025.
The three companies show stark differences in operational efficiency and growth trajectories. Asbury posted 13% revenue growth year-over-year in Q3, significantly outpacing AutoNation’s 6.9% and Lithia’s 4.9%. Asbury’s profit margin of 3.15% exceeds AutoNation’s 2.38%, despite AutoNation’s larger scale.
Asbury’s Tekion implementation is delivering measurable results. During the four-store pilot program, productivity per employee increased across all locations. Training time for service advisors dropped from five days to one day. The platform is eliminating nearly 70% of third-party plug-ins, reducing complexity and costs. The company plans to complete the full transition by 2027.
AutoNation’s digital approach has been more gradual, focusing on incremental improvements to existing systems rather than wholesale platform replacement. While their omnichannel capabilities are robust, the company’s declining profitability trend raises questions. Net income fell 32% from $1.02 billion in 2023 to $692 million in 2024.
Asbury CEO David Hult: “Even in the first few months […] our productivity per employee went up across all stores. From sales to service, this platform has the potential to enhance the guest experience, improve team efficiency, and lower the cost per transaction.”
Hult on strategic direction: “This was an important quarter in managing our growth strategy for Asbury, marked by the expansion of Tekion to all our stores in the Baltimore-DC market and integrating the Chambers group.”
AutoNation’s management has been more cautious in recent earnings calls, with analysts maintaining a Hold rating and lowering price targets. The company’s focus has shifted toward cost management rather than aggressive technology transformation.
Lithia’s management continues emphasizing acquisition-driven growth, though their Q3 earnings growth was negative at 4.7% year-over-year, contrasting sharply with Asbury’s positive momentum.
Based on operational metrics, growth rates, and technology implementation, Asbury Automotive appears best positioned to benefit from the digital transformation trend. The company is growing revenue twice as fast as AutoNation while maintaining superior profit margins. The Tekion platform is already delivering quantifiable productivity gains that translate directly to the bottom line.
Perhaps most telling is the valuation gap. Asbury trades at a P/E ratio of 8x, compared to AutoNation’s 12x and Lithia’s 10x. Despite faster growth and better margins, the market hasn’t fully recognized Asbury’s competitive advantages. The company’s PEG ratio of 0.515 suggests significant undervaluation relative to its growth rate.
AutoNation and Lithia both have strong market positions and digital capabilities, but neither is executing with the same operational excellence. AutoNation’s profitability decline and Lithia’s slowing earnings growth indicate they’re facing headwinds that Asbury has managed to avoid.
The digital transformation of automotive retail is creating winners and losers. Asbury Automotive’s aggressive platform modernization, combined with superior operational execution and faster growth, positions it as the primary beneficiary. While all three companies will participate in the industry’s evolution, Asbury’s measurable productivity gains and attractive valuation make it the standout choice for investors focused on this trend.
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