AutoCanada Sells Two Stellantis Dealerships to Boost Profitability

AutoCanada Inc., one of Canada’s leading dealership groups, has sold two Stellantis dealerships in Alberta to “improve profitability and reduce leverage.” The company announced the sale of Airdrie Chrysler, Dodge, Jeep®, Ram (CDJR), and Ponoka CDJR dealerships as part of a “strategic divestiture.”

This move follows AutoCanada’s announcement during its August earnings call that it would explore selling “non-profitable and non-core assets” to realign its business. CEO Paul Antony stated, “We are taking actions that allow us to concentrate our resources and efforts to improve core operations, optimize our cost structure, strengthen profitability, and reduce leverage.”

While the financial terms of the sale were not disclosed, records from the Alberta Motor Vehicle Industry Council (AMVIC) confirmed that the two dealerships were purchased by Kaizen Automotive Group, a Calgary-based company with 11 other franchised dealerships in Alberta, one in Ontario, and six in the United States.

The two CDJR stores, located between Calgary and Edmonton, generated $86.5 million in sales over the 12 months ending June 30, 2024. AutoCanada, headquartered in Edmonton, owned 17 Stellantis dealerships across Canada and the U.S. before the sale.

AutoCanada has been struggling financially, reporting a loss of $33.1 million in the second quarter of 2024. Antony previously pointed to sluggish sales at Stellantis-branded dealerships as a major contributor to the company’s recent financial difficulties. Fewer new-car sales led to fewer trade-ins, weakening the used-vehicle market as well.

In addition to selling the two Alberta CDJR dealerships, AutoCanada is exploring selling its U.S. dealership platform, Leader Automotive Group, which operates 18 stores in Illinois. The U.S. division suffered a $35.5 million loss during the same three-month period.

Source: Automotive News Canada