Why the Largest U.S. Auto Dealer Isn't Interested in Chinese Cars — for Now

Why It Matters

The stance highlights how U.S. franchise regulations and ROI concerns can slow Chinese automotive entry, reshaping competitive dynamics for domestic dealers and manufacturers.

Key Takeaways

• Lithia cites franchise law costs as primary barrier
• US dual‑franchise rules differ from UK's flexible model
• Chinese EV market share grew 70% in five years
• Lithia's profit relies 50‑60% on service, parts
• Company keeps relationships with Chinese brands for future

Pulse Analysis

Lithia Motors’ cautious approach underscores a structural friction point in the U.S. automotive retail landscape. Unlike the United Kingdom, where the company can slot Chinese models into existing showrooms for under $100,000, American franchise statutes vary by state and grant manufacturers substantial control over dealer participation. This regulatory mosaic forces dealers to weigh hefty capital outlays against uncertain sales volumes, especially when a significant portion of Lithia’s earnings—roughly half—derives from service and parts rather than vehicle transactions.

The broader backdrop is a rapid surge in Chinese electric‑vehicle production. Over the past five years, Chinese brands have lifted their global market share by nearly 70%, propelled by aggressive pricing, expanding model line‑ups, and strategic overseas investments. While some Chinese‑origin cars already appear in the U.S. under legacy brands like Buick and Volvo, pure‑play Chinese marques such as BYD and Nio have yet to secure a foothold. Trade policy shifts, including Canada’s recent removal of tariffs on Chinese imports, further illustrate the evolving competitive pressure these manufacturers exert on established automakers.

For U.S. dealers, the Lithia decision signals both a warning and an opportunity. The heavy reliance on after‑sales revenue means any new brand must deliver not just vehicle sales but a sustainable service ecosystem. As franchise laws slowly adapt and consumer appetite for affordable EVs grows, dealers may revisit Chinese partnerships, especially if manufacturers offer favorable warranty and parts support. Keeping channels open now positions Lithia to capitalize on future market openings without committing premature capital, a prudent balance of risk and strategic foresight.

Why the largest U.S. auto dealer isn't interested in Chinese cars — for now

By Michael Wayland (@MikeWayland) · Published Wed, Feb 11 2026 3:49 PM EST · Updated Wed, Feb 11 2026 4:07 PM EST

Key Points

• The largest U.S. auto dealer would not be immediately interested in selling vehicles from China‑based brands domestically, its CEO said Wednesday.

• Lithia Motors CEO Bryan DeBoer said politics, logistics or potential consumer backlash aren't necessarily the main issues.

• The hesitation is more about potential cost, return‑on‑investment and needed infrastructure, largely due to franchise rules for brands in the U.S.

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Photo: Nio cars are seen displayed at Nio House, at the Chinese electric‑vehicle (EV) maker's manufacturing hub in Hefei, Anhui province, China, April 2 2025. Florence Lo | Reuters

DETROIT — The largest U.S. auto dealer isn’t interested in selling vehicles from China‑based brands domestically right now, its CEO said Wednesday.

But it’s not necessarily because of politics, logistics or potential consumer backlash, according to Lithia Motors CEO Bryan DeBoer. His company already has at least ten stores selling vehicles from three Chinese companies in the United Kingdom.

DeBoer, who has grown Lithia exponentially in recent years, said the potential cost, return‑on‑investment and needed infrastructure—largely due to franchise rules in the U.S.—are the biggest hindrances right now.

“We’re quite excited that we’ve got that opportunity in the United Kingdom, but there’s a big fundamental difference,” DeBoer told investors Wednesday, citing “dueling of franchises” practices in the U.K. that allow Lithia to offer brands from different companies in the same showroom if they’re deemed competitors.

DeBoer explained that the dealer can be allowed to put vehicles from a company such as China’s Chery Automobile— which is growing in Europe—into an existing showroom in the U.K., and it would cost less than $100,000. That’s not the case in the U.S., where franchised dealer laws are strict, vary by state, and give manufacturers considerable influence over dealership decisions.

Video: “This market is actually quite resilient,” says Lithia & Driveway CEO Bryan DeBoer

His comments come as Chinese automotive brands are increasingly exporting and expanding outside of their home market. Global market share for Chinese brands has jumped nearly 70 % in five years, and many experts see a threat to U.S. automakers, including the anticipated entrance of Chinese brands into America. There have been China‑produced vehicles on sale in the U.S. from brands such as Buick and Volvo, but none yet from Chinese brands such as BYD, Nio or others.

In the U.S., Lithia would need to establish new retail locations and service operations to support sales of Chinese brands, which would mean making completely new investments. DeBoer noted that roughly 50 % to 60 % of the company’s profits come from service and parts.

“I think we would probably not be early adopters when it comes to the United States or possibly even Canada, primarily because we’re usually not in a dual‑franchise situation,” he said.

China’s most recent announced expansion is to Canada, a relatively small vehicle market that removed 100 % tariffs on imported vehicles from China amid a trade dispute with the Trump administration.

But DeBoer said the Oregon‑based company isn’t completely shutting the door, as Chinese brands continue to grow globally.

“We do have building relationships with a number of Chinese brands,” he said. “We’ll keep our minds open and look at what opportunities present themselves in the future.”

DeBoer’s remarks came during Lithia’s call to discuss its fourth‑quarter and year‑end earnings, which included annual increases of 4 % in revenue and 3.1 % in gross profit.