What Lithia Motors, Inc. told the SEC could break it.

A significant portion of the vehicles Lithia sells — and all of the parts — are manufactured outside its operating regions, so import restrictions, tariffs and trade-policy shifts could impair its ability to sell vehicles or parts profitably.

“Import product restrictions, currency valuations, tariffs, U.S. and foreign trade policies and risks may impair our ability to sell vehicles or parts profitably. A significant portion of the vehicles we sell are manufactured outside of the geographic regions in which we operate, and all of the vehicles we sell include parts manufactured outside of the geographic regions in which we operate.”

Lithia's UK dealerships (the UK is ~18% of revenue) operate without the franchise-law protections that exist in the U.S., leaving those operations more exposed to manufacturer franchise-agreement terms and termination.

“The majority of our dealerships in the United Kingdom currently operate under franchise agreements with vehicle manufacturers, however, unlike in the United States, the United Kingdom generally does not have automotive dealership franchise laws and, as a result, our U.K. dealerships operate without these types of specific protections that exist in the United States.”

New vehicles from five manufacturers — Honda, Toyota, Ford, BMW and Stellantis — make up 25% of Lithia's sales, concentrating supply risk if any of those manufacturers hits financial distress, reorganization or bankruptcy.

“New vehicles from five manufacturers, Honda, Toyota, Ford, BMW, and Stellantis, represent 25% of our sales. We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, or other issue affecting one or more of these manufacturers.”