Zacks Equity Research identifies Lithia Motors and Sonic Automotive as two auto retailers worth watching despite eroding consumer purchasing power. The industry faces headwinds including elevated vehicle prices, high borrowing costs, and a forecasted 2.9% decline in full-year new-vehicle sales to 15.8 million units. Sonic Automotive, carrying a Zacks Rank #2 (Buy), has expanded through acquisitions and its EchoPark digital platform, with consensus estimates projecting 5% and 8% sales growth for 2026 and 2027. Lithia Motors, with a Zacks Rank #3 (Hold), added $2.4 billion in annualized revenues through acquisitions in 2025 and targets $2-$4 billion in acquired revenues in 2026, while its Driveway and GreenCars platforms support an omnichannel strategy.
Lithia Motors IncIndustry headwinds (high prices, borrowing costs, declining sales) hurt demand, but acquisitions and omnichannel platforms may offset.
Sonic Automotive IncIndustry headwinds (high prices, borrowing costs, declining sales) hurt demand, but acquisitions and EchoPark platform may offset.