Wheels secures strategic investment from Marubeni and Lithia

ILLINOIS

Wheels, a prominent North American fleet management company, has announced a strategic investment from Marubeni Corporation and Lithia & Driveway. This move represents a notable shift in the industry landscape, bringing together established players to foster innovation and growth in the rapidly evolving mobility space.

The investment, which grants Marubeni and Lithia a substantial minority stake in Wheels, is poised to inject new expertise and resources into the company's operations. Wheels, known for its pioneering role in fleet leasing and services, views this partnership as an opportunity to enhance its product offerings and maintain its competitive edge in serving corporate clients.

Marubeni Corporation, a Japanese conglomerate with a long history of investments in the U.S. automotive sector dating back to 1958, brings a wealth of experience to the table. The company's portfolio includes diverse interests across the automotive value chain, from consumer auto finance to commercial vehicle rentals. This new investment in Wheels aligns with Marubeni's strategy of expanding its footprint in the mobility sector and complements its existing holdings.

Lithia & Driveway, one of the largest automotive dealership groups in the United States, adds another dimension to this strategic partnership. Lithia's extensive network and deep understanding of vehicle lifecycle management, from acquisition and financing to maintenance and repair, closely aligns with Wheels' core business model. This synergy is expected to drive innovations in fleet management services and improve customer experiences.

The investment is being made in partnership with funds managed by Apollo, a global alternative asset manager. Apollo's involvement underscores the long-term potential seen in Wheels and the broader fleet management industry. The collaboration between Marubeni, Lithia, and Apollo is expected to provide Wheels with access to diverse funding channels, particularly through Marubeni's established relationships in the Japanese financial markets.

Shlomo Crandus, CEO of Wheels, expressed enthusiasm about the new partnerships, stating, "We are excited to receive the backing of two highly sophisticated investors. Our clients are always at the heart of everything we do, and that will continue as we innovate and grow with Marubeni and Lithia." Crandus also highlighted the historical connection between Wheels and the dealership business, noting that the company's origins in 1939 were rooted in an auto dealership, much like Lithia's current operations.

The strategic investment is expected to facilitate Wheels' expansion of its service offerings, potentially including new technologies and solutions for fleet management. As the automotive industry continues to evolve, with trends such as electrification, autonomous driving, and shared mobility gaining traction, Wheels is now better positioned to adapt and lead in these areas.

Industry analysts view this development as a sign of increasing consolidation and strategic partnerships in the fleet management and automotive services sectors. The combination of Wheels' established market presence, Marubeni's global reach and financial expertise, and Lithia's automotive retail know-how create a powerful alliance that could reshape the competitive landscape.

The transaction, subject to customary closing conditions, is anticipated to be completed in the third quarter of 2024. As the deal moves forward, stakeholders in the automotive and fleet management industries will be watching closely to see how this partnership influences market dynamics and drives innovation in fleet solutions.