(Reuters) -U.S. auto retailer Lithia Motors Inc on Wednesday trounced first-quarter profit estimates and said it was running ahead of schedule to hit its $50 billion annual revenue target as it benefits from higher prices and strong demand. A global semiconductor chip shortage has created a supply crunch and forced automakers to raise prices, while low interest rates, government stimulus and a preference for private vehicles during the COVID-19 pandemic have bolstered demand. This has boosted profits at U.S. auto retailers. Average gross profit per new vehicle jumped 33% to $2,910 in the first quarter ended March 31, while average gross profit per used vehicle rose 9% to $2,307, Lithia said. “New vehicle margins may remain elevated in the near-term due to continued microchip and other supply chain shortages,” Chief Operating Officer Chris Holzshu said on a post-earnings call. The company earned an adjusted profit of $5.89 per share, smashing the Refinitiv estimate of $4.76. On Tuesday, rival AutoNation Inc had reported a quarterly adjusted profit that almost tripled. Lithia’s total revenue surged 55% to $4.34 billion, compared with estimates of $3.91 billion. The company’s shares rose about 2% to $381.44 in afternoon trade, adding to the about 30% gain this year. Lithia said it was running ahead of its schedule to hit a target of $50 billion in annual revenue as part of a five-year growth plan, that includes acquisitions, unveiled in July last year. “With a record $6.5 billion of expected annualized revenue acquired in the first nine months of our five-year plan, we are well ahead of schedule,” said Chief Executive Officer Bryan DeBoer. Earlier this month, Lithia bought Troy-based auto dealer The Suburban Collection, adding its 56 auto dealerships and an expected $2.4 billion in annualized revenue. AutoNation has also predicted more consolidation among U.S. auto dealers as buyers increasingly move online.