Grosses Get Squeezed, Lithia Gets Lean, LinkedIn Fights Slop

Episode #1415: Today we’re tracking margin pressure across the largest dealer groups, Lithia’s behind-the-scenes push to improve affordability and efficiency, and LinkedIn’s new user-powered effort to clean AI slop out of the feed. Average gross profit per unit softened across the largest public dealer groups in Q2, but the story isn’t all bad. New-vehicle grosses came under pressure, while used vehicles provided a sturdier profit lane and June sales helped the quarter finish with more momentum than many expected. All eight top dealer groups posted year-over-year declines in new-vehicle gross profit per unit. Lithia fell $288 to $2,728, while Penske dropped $527 but still led the group at $4,374. Lithia remained the volume heavyweight, generating $9.8 billion in revenue across 467 stores and retailing more than 104,000 new and 106,000 used vehicles. Used-vehicle performance held up better. Asbury improved used gross by $281 per unit, while Lithia gained $107. Dealers are leaning more heavily on street purchases as used demand stays strong, but fewer new sales mean fewer trade-ins and less dependable used inventory. Stephens analyst Jeff Lick said, “Q2 was a lot better than Q1, and the economy is holding up.” Lithia Motors posted record second-quarter revenue, but the megadealer is treating affordability like an operational challenge, not just a pricing problem. The company is rolling out new technology, consolidating management roles and expanding remote F&I while leaning on fixed operations and finance to deepen customer relationships. Lithia reported record consolidated Q2 revenue of $9.8 billion, up 2.2%, although same-store revenue declined 1.6% to $9.2 billion. New-vehicle gross profit per unit fell 11.1% to $2,718, while used-vehicle gross improved 6.3% to $2,019. Lithia is preparing to deploy Pinewood.AI’s dealership management system across its U.S. stores and is combining some leadership roles across sales and fixed operations. Remote F&I is operating in roughly a dozen stores, offering potential labor savings while giving customers and employees more flexibility. Aftersales generated 42.2% of gross profit, while Driveway Finance reached 18% penetration of all U.S. units sold. CEO Bryan DeBoer said, “If we can service our customer’s car for 10 years rather than three to five years, we all win a lot more.” LinkedIn is adding an “AI slop” flag that lets users report low-quality, AI-generated posts. The feedback will help the platform retrain its detection models and improve what appears in users’ feeds. The new option appears in the three-dot menu on every post. LinkedIn says it is targeting repetitive, low-value content—not AI use itself. A recent study found LinkedIn accounted for most flagged AI-written long-form posts across several major platforms. The company says it catches hundreds of thousands of automated comments daily and has blocked billions of automation attempts. Other platforms are likely to follow with similar tools, giving users more control while creating new moderation challenges.