Dealer Groups

Lithia moves closer to used-vehicle per dealership sales goal

Lithia Motors is moving closer to its used-vehicle sales goal.

In its third quarter that ended Sept. 30, the Medford, Ore., new-car dealership group retailed an average of 67 used cars and trucks per store, per month. That was up from 65 in the year-ago quarter, said its president Bryan DeBoer.

Lithia’s goal is to sell an average of 85 used-vehicles, per store, per month, DeBoer said.

Over the last several years Lithia has been on a buying spree, acquiring single-line dealerships and large dealership groups.

The dealerships it purchases are typically underperforming their potential and sell significantly fewer used vehicles than the 71 units per month average sold by stores Lithia has owned for more than two years. The typical dealership Lithia acquires sells about 38 used-vehicles per month, DeBoer said.

“We are making incremental progress towards our goal of 85 used units per store, more than offsetting the effect of acquisitions that sell fewer used vehicles than our seasoned stores do,” DeBoer said during the company’s quarterly earnings conference call in October.

“I think our opportunity is coming in the three- to eight-year-old vehicle, which is still somewhat depressed,” he said. “And that’s what’s going to really take us up to that next level and get to that 85 units per store.”

Three- to 8-year-old cars and trucks Lithia calls “core” vehicles generate a gross profit margin of about 12 percent, DeBoer said.

The company’s gross profit margin on certified vehicles is 8 percent to 9 percent and its “value” vehicles over 8 years old yield a gross profit margin of about 18 percent, he added.

Publicly held Lithia operates 166 dealerships, representing 30 vehicle brands in 18 states.

This year, Lithia has opened one dealership and acquired 15 others. Its latest acquisition is Downtown Los Angeles Auto Group in Los Angeles, which it purchased in its third quarter.

Lithia chief financial officer John North said the company anticipates buying more dealerships, especially if the seasonally adjusted selling rate plateaus or slows down.

“Conversely, if the SAAR is strong, it’s going to keep acquisitions maybe on the sidelines a bit more,” North added.

Revenue grows, net income drops

Lithia’s net income in the quarter that ended Sept. 30 dropped 4 percent to $51.9 million compared to the same quarter last year. But its revenue for the quarter grew 18.7 percent to $2.7 billion compared to last year.

Used-vehicle retail sales accounted for $679.6 million of that revenue, which was a 17.0-percent improvement over last year’s third-quarter results. The company retailed 34,737 used cars and trucks in the quarter, up 17.2 percent.

The average selling prices of a used car or truck at Lithia dealerships slipped 0.2 percent to $19,565 in the quarter, and the average gross profit per used unit retailed dropped 2.5 percent to $2,264.

Lithia’s same-store retail used-vehicle revenue was up 1 percent to $2.3 billion, same-store used retail sales grew 3.3 percent to 30,133 units and same-store average gross profit per vehicle retailed was up 1.1 percent to $2,364.

Same-store sales of certified used vehicles account for about a quarter of those sales but were “down a little bit” from July through September, DeBoer said.

In the quarter, same-store certified unit sales volume decreased 4 percent, core unit volume increased 7 percent and value auto unit volume increased 4 percent.

‘Mining core product’

“When certified are pretty plentiful, which they are now, they’re easy to find, which means we can spend our time on going and mining core product and value product, which is where we make all of our money,” DeBoer said.

As of Sept. 30, Lithia’s days’ supply of used vehicles stood at 63, up from 57 on the same day last year. North said the uptick in used-vehicle supply is a result of the company ramping up used inventory before cost of sales catches up.

“When you look at the aging overall, we’re really comfortable with where the level is,” North said. “We think that those are investments. That’s the incremental dry powder we’re trying to unlock.”

Lithia’s retail new-vehicle sales in the quarter grew 18.6 percent to 45,570, and average gross profit per new vehicle retailed dropped 2.1 percent to $1,932. The average new vehicle selling price rose 1.2 percent to $34,169.

Lithia reported that F&I revenue in the quarter was up 15.2 percent to $101.0 million and that average F&I gross profit per unit slid 2.4 percent to $1,258. F&I gross profit generated by recently acquired dealerships ranged from $800 to $1,100 per unit while it was “running north of $1,400 a copy” on Lithia’s more seasoned stores, said Christopher Holzshu, Lithia executive vice president and chief human resources officer.

Of the vehicles Lithia retailed in the quarter, it arranged financing on 72 percent, sold a service contract on 45 percent and sold a lifetime oil product on 26 percent, North said

Standalone used-car stores a big 'opportunity' for Penske

BLOOMFIELD HILLS, Mich.  - 

During the Q&A portion of Penske Automotive Group’s latest quarterly earnings call, chairman Rogers Penske was asked if his viewpoint on CarShop and CarSense had changed since the dealer group purchased the respective used-car standalone retailers.

 “Yeah, it’s changed. I like it more,” Penske said with a laugh.

“I think we’re very fortunate to get into this business,” he said. “The technology, the people. We’ve had no turnover with senior management. Both of these businesses, I think they applaud the fact we’ve come in with capital, with ideas, with an expansion mode offense.”

Fortunate and prudent, perhaps.  

Quarterly numbers, expansion plans

In the third quarter, Penske Automotive’s standalone used-car businesses — which include CarSense in the U.S. and CarShop in the U.K — retailed 11,626 units.

Year-to-date, which includes results since acquisition, the standalone platforms have retailed 30,952 used units.  

Quarterly revenue from the standalone stores in Q3 approached $200 million, while year-to-date revenue was at $535.7 million.

Gross profit per unit retail was at $1,152 in the quarter, with the year-to-date figure at $1,222.  

F&I gross profit per unit on these sales were $1,188 in Q3 and $1,182 year-to-date, putting the total variable gross profit per unit at $2,340 and $2,404, respectively.

“We believe these used-vehicle dealerships further diversify our business and provide an opportunity to capitalize on a highly fragmented used-vehicle marketplace. We also believe these businesses provide an unlimited white space for scalable expansion,” Penske said during the call. “We’ve identified several new markets for expansion of the CarSense and CarShop brands and are on track to double those number of locations within 24 months of the initial purchase.”

The group announced in early January it had signed an agreement to buy CarShop, a chain of five standalone used-car retail stores in the U.K. That deal ultimately closed in February.  Penske announced the purchase of US-based CarSense in December, then closed that purchase in January.

There are likely to be a handful or more of expansions from these two platforms.

In the U.S. in particular, CarSense will likely be “growing off that base” in Pennsylvania and New Jersey.

“The interesting thing is, when you look at those two businesses, take all the inventory out, probably the total net-book value of the fixed assets is probably around $5 or $6 million,” he said. “So we don’t have tens of millions of dollars of fixed assets … we have cash and we have cars and we have profit.”

Penske’s goal is to take what its learning from those standalone stores and see if it can be utilized in the retailer’s traditional business. However, the goal is not — or does not appear to be — to compete with CarMax.

Brushing aside any comparison to CarMax, Penske said that used-car giant exists in a “zip code that we’re not in.”

Penske’s goal, rather, is to go into areas that can be scalable for the company, where it has employees, and so forth.  

“What we’re trying to do is look at areas that we can go into, where we have scale and we have people that we could transfer from the traditional business into this business as we expand,” he said. “I’m very confident that we’ll see at least six, either through acquisition or new-store openings, take place in our two businesses next year.”

Fair investment

These standalone stores, of course, aren’t the only used-car projects on Penske’s radar.

Fair, an app that provides used-car leasing to consumers on a flexible basis, announced on Oct. 20 that it was closing a BMW i Ventures-led strategic funding round that also includes investments from Penske Automotive Group, among other strategic investors.

In a news release, Fair founder and chief executive officer Scott Painter said the company will utilize Penske’s physical infrastructure.

In the same release, Penske president Robert Kurnick said: “Penske is committed to be on the leading edge of technology, and our investment with Fair reflects that commitment. The potential appeal of the Fair app to consumers is compelling while keeping our company at the forefront of bringing mobility solutions to the marketplace.”

During the quarterly call, Roger Penske also discussed the Fair investment.  

“We’ve invested $1.2 million, less than 1-percent ownership. We think this is an interesting startup,” he said. “You’re seeing GM and Ford and all these other people investing in some of these different business ventures and ideas, so we’re going to learn from this one and see if there’s any way that this might have an application to us at this particular time.”

Penske added that the company is exploring making $1 million to $5 million investments in similar projects like ride-sharing over the next 12 months.

 

 

 

 

 

Sonic’s EchoPark used-car stores: cash-positive, in line with expectations

CHARLOTTE, N.C.  - 

Sonic Automotive’s newest EchoPark used-car store in Colorado Springs, Colo., was “cash positive” in its third month of operation — about six months ahead of when the company’s initial EchoPark stores reached cash positive positions, said Sonic president Scott Smith.

“EchoPark results were in line with expectations,” Smith said during the company’s third-quarter earnings call in October. “Our store platform in Colorado was again cash flow positive during the third quarter and moving towards overall profitability.”

The Colorado Springs EchoPark store opened in June.

Smith also said the dealership group plans to open 10 more EchoPark stores by the end of 2018.

Those stores are slated for Florida, Georgia, North Carolina, South Carolina and the Texas markets of Dallas-Fort Worth, San Antonio, Houston and Austin.

Sonic’s pre-owned stores segment, which includes its six EchoPark stores, all in Colorado, and its two non-EchoPark stores in Florida and Texas, retailed 2,400 used units in the quarter, up 815 units, or 51.4 percent, the company said.

Used-vehicle gross profit per unit retailed at Sonic’s pre-owned stores decreased 24.3 percent to $830, “due primarily to higher costs of acquisition of inventory at auction as the company ramped up inventory at our newest locations,” according to a document Sonic filed with the federal government.

Jeff Dyke, Sonic executive vice president of operations, said Sonic remains committed to establishing EchoPark as a national brand capable of going head-to-head with used-car retailing giant CarMax Inc.

Sonic opened its first EchoPark used-only store in November 2014 in Denver.

“I can’t put a time line on when we’d be at the same level of stores as CarMax, but certainly our goal is to build a brand that will compete with them,” Dyke said during a telephone interview immediately following Sonic’s earnings call.

“They’re kind of by themselves — from our perspective — across the country, and there’s plenty of room in that space. We think there is lots of upside, and that’s our target.”

A national brand

As Sonic adds more EchoPark stores and establishes its national brand, look for stores to open in markets where Sonic does not have a new-car store presence, Dyke said.

“That’s been our intention all along, and we are growing as quickly and efficiently as we can,” Dyke said during the earnings call. “You can expect to see an EchoPark in most of the major metros and used-car markets across the country.”

Headquartered in Charlotte, N.C., publicly-held Sonic Automotive on Sept. 30 operated 104 new-car dealerships in 13 states, representing 25 brands.

CarMax of Richmond, Va., also publicly-held, is the nation’s largest retailer of used vehicles with over 180 used-vehicle stores in 39 states. It retailed 671,294 used cars and trucks in its most recent fiscal year that ended Feb. 28, 2017.

Dyke said EchoPark has been “very” successful in its mission to purchase from consumers many of the used cars and trucks vehicles it sells, but would not provide details.

“We don’t want to give out too much information, but we’ve had some really nice short-term success with EchoPark,” Dyke said. “We want to keep watching the brand grow. As we become more successful, we’ll share more information.”

Sonic’s used-vehicle days’ supply stood at 38, down from 41 in the third quarter of 2016.

Smith said he expects used-vehicle days’ supply “on the Sonic side” to continue to drop through the end of the year, and inventory will be added as new EchoPark stores open.

A “challenging” quarter

In its third quarter that ended Sept. 30, Sonic’s revenue dropped 2 percent to $2.51 billion compared to last year’s third quarter.

Smith said the hurricanes that hit Texas in August and the southeast in September made the quarter “challenging” from an operational standpoint.

Hurricane Irma either temporarily closed or impacted to varying degrees 24 new-car dealerships in Sonic’s Alabama, Florida and Georgia markets; Hurricane Harvey temporarily closed 19 new-car dealerships and five collision repair centers in its Houston market.

The BMW brand is “at the bottom of their cycle in terms of product” said Dyke, explaining that the company’s BMW dealerships in its Houston market were already struggling prior to the hurricane.

BMW is “30 percent of our profit mix, and when they struggle its more difficult for us to overcome,” Dyke added.

But despite those headwinds, Sonic’s net income increased 7.3 percent to $19.4 million in the quarter, and its gross profit increased 1 percent to $362.6 million.

Sonic’s financial results were boosted by its F&I revenue, which was up 3.7 percent to $92.9 million and its F&I gross profit per retail unit, excluding fleet, which was up 4.8 percent to $1,408.

Sonic’s overall used-unit sales dipped 0.3 percent to 30,841, and its revenue per used unit was up 0.1 percent to $21,391 compared to the year-ago quarter. Gross profit per used unit was down 0.9 percent to $1,269.

Sonic’s same store used-unit sales dropped 2.3 percent to 29,854, revenue per used unit rose 0.2 percent to $21,471, and its gross profit per used unit declined 1.1 percent to $1,224.

CarMax names next COO

RICHMOND, Va.  - 

CarMax chief operating officer Cliff Wood will retire by the end of next summer, the company said Monday.

Taking on the COO role at that point will be Ed Hill, who has been CarMax’s executive vice president, strategy and business transformation since 2016.

Wood has been with the company since 1993, when he was a buyer at the first CarMax location in Richmond, Va.

“Cliff has been instrumental in building CarMax’s industry-leading store operations,” said Bill Nash, CarMax president and chief executive officer, in a news release. “He has helped guide the company successfully through many years of growth and has built a strong field leadership team.

“We are incredibly grateful for his many years of service and contributions to CarMax’s success.”

Hill, meanwhile, has been with the company since 1995, when he came aboard as director of service operations, eventually becoming senior vice president in 2012 and leading corporate strategy.

“Ed was the driving force behind the development and ongoing enhancement of our vehicle reconditioning process, one of CarMax’s key competitive advantages,” Nash said. “He has been an integral member of the executive leadership team, and his breadth of experience in operations, corporate strategy and enterprise change management will be essential for our future growth.”

In moves effective Wednesday, CarMax said Darren Newberry will be promoted from vice president of regional sales to senior vice president of store operations, and Joe Wilson is being promoted from vice president of merchandising operations to senior vice president, store strategy and logistics.

UK fuels Group 1’s Q3 international performance

HOUSTON - 

While Group 1 Automotive watched some rebounding happen in Texas, the dealer group also cheered what’s occurring on its international fronts, especially in the United Kingdom.

As the nation’s new-vehicle sales declined nearly 9 percent as a whole during the third quarter, Group 1 posted a 2.9-percent sales increase on a same-store basis.

Also of note, Group 1 watched its total used-vehicle gross profit rise by 22.2 percent.

Furthermore, Group 1’s operations in the U.K. generated a 10.6-percent increase in aftersales gross profit along with a 9.8-percent lift in F&I gross profit.

“We are in an emerging company in the U.K., and we are quite a strong emerging company,” Group 1 president and chief executive officer Earl Hesterberg said during the company’s latest conference call. “We have a pretty good brand mix. The power in the third quarter came from our Audi business and our Ford business. And we are now broadening our brand exposure a bit. The most recent acquisition has put us into the Volkswagen network, the Toyota network, and we’re becoming reasonably significant Jaguar-Land Rover dealerships.

“So we are getting some scale now. We have some power. And this always has been a good business for us,” Hesterberg continued. “But over the last two years, we have made two acquisitions of about a dozen stores each. So, now, we’ve got some muscle, and we’ve got a very capable team. And I think that’s how we’re able to outperform the market.

All told, Group 1 has 3,000 employees, 43 dealerships and $2 billion per year in annual revenues germinating out of the U.K.

“I have been able to spend a lot of time over there. It’s not a small business anymore. And I think we can continue to outperform the market there,” Hesterberg said. “We have some stores that don’t perform well and we’ve got to improve those or get rid of them. I think that U.K. is a very positive story for Group 1 and I don’t think it’s a one-quarter phenomenon.”

Down in Brazil, Group 1 calculated that its South American operations accounted for 4.0 percent of total revenues and 3.3 percent of total gross profit.

The company reported that total same-store revenue grew 14.0 percent and total same-store gross profit increased 22.4 percent, reflecting strong growth in same-store total used-vehicle gross profit of 27.7 percent and a 30.9-percent rise in same-store aftersales gross profit.

In addition, Group 1’s Brazilian same-store F&I gross profit per unit jumped 30.6 percent.

“Through the economic downturn in Brazil, which is what probably has been since the first day we went there, we have downsized that business to get the weak parts and the bad parts out. And we know have a very strong core of business,” Hesterberg said. “We’re the largest Honda retailer in the country, good Toyota business and I think we are the second largest Land Rover and BMW group in Brazil. We have 16 dealerships. We also have Mercedes dealership there I should mention.

“We would benefit significantly from more scale there. We have an incredible management team there that we have developed, good local team, and we’ve got great brand mix, but we could use some more muscle amount, some more scale,” Hesterberg went on to say. “I’m going to work on that.”

Group 1 sees unprecedented sales in Houston

HOUSTON - 

The significant damage Hurricane Harvey left in Texas gave Group 1 Automotive the opportunity to watch new and used vehicles roll over the curb at daily sales rates during the last three weeks of September that “were the highest we have ever seen,” says president and chief executive officer Earl Hesterberg.

During the dealer group’s third-quarter conference call, Hesterberg elaborated about the development saying, “we’ve never seen anything like that before, and I don’t think we will ever see anything like that again. Our Houston stores on new vehicles basically doubled what they normally do. And bear in mind, these are some pretty big stores.

“Used vehicles were not up to that degree. They were probably up, depending on the stores, 30, 40 or 50 percent, probably more like 50 percent. But that tapered off, I would say, as we moved into the second week of October, but it’s still significant,” Hesterberg went on to say.

As Group 1 mentioned as a part of its third-quarter financial statement, some of its stores in Houston and Beaumont, Texas, were closed for seven days or longer as Harvey soaked the region with some of the highest rainfall totals ever recorded. With experts suspecting that Harvey might have destroyed nearly 1 million vehicles, Hesterberg is projecting sales to remain brisk at Group 1 stores

“I would expect that to continue well beyond the fourth quarter. Now, it will probably taper off from where it is now, but I think this will last for quite some time,” he said.

While not related to Harvey, Hesterberg also pointed out that Group 1 posted “noticeable improvement” in other regional footprints, including Oklahoma, central Texas and New England.

Group 1 executives did not specifically address their used-vehicle inventory, but Daryl Kenningham, who is president of U.S. operations, touched on new-model inventory. Kenningham said that the company overall was “happy” with the amount of new units on group lots, but that the company remained “tight” in connection with three brands, “Toyota, Honda, Lexus, specifically.”

Stockpile of cash

Group 1 finished the third quarter with nearly $67 million in cash among its assets; an amount representing a 218-percent spike compared to the figure at the end of the 2016 and triggering curiosity from Wall Street observers about what the company might do.

“We think acquisitions is our first best use of cash. You have seen that we have pulled the trigger on a few recently,” said John Rickel, senior vice president and chief financial officer of Group 1 while referencing how Group 1 purchased a pair of Jaguar-Land Rover dealerships in New Mexico as well as rolling out an Audi rooftop in Fort Worth, Texas.

“That’s the first, best use. And then from there, we basically are opportunistic between share repurchases and dividends,” Rickel added.

CDK acquires program partner, dealer data analytics solution provider

HOFFMAN ESTATES, Ill. - 

CDK Global announced last week it has purchased partner program participant and full-service enterprise reporting company Dashboard Dealership Enterprises (DDE).

DDE has provided its business analytic reporting suite, Executive Eye, to some of the largest dealership groups in the U.S. and increased its customer base to 600 dealership locations within the last 15 years, according to CDK.

As part of the acquisition, DDE chief executive officer Josh Blick and chief operating officer William Page III will join CDK to help lead further development of Executive Eye.

The acquisition of DDE allows CDK to deliver a more robust reporting solution for dealers, the company said.

“We are excited to bring the capabilities of Dashboard Dealership Enterprises to our customers,” CDK president and chief executive Brian MacDonald said in a news release.

“By adding industry-leading dashboard and reporting capabilities, we will immediately help CDK customers effectively measure the success of their businesses. The company’s experience with many of the nation’s largest dealers also gives us great confidence in taking Executive Eye to our customer base,” he explained.

Additionally, Executive Eye will play a vital role in the company’s efforts to enable end-to-end automotive commerce and help dealers improve efficiency and profitability via metric reporting solutions, according to the company.

“We are very pleased to be able to join CDK and continue improving on the foundation we’ve built with Executive Eye,” added Blick. “The broad capabilities of CDK will help ensure we’re delivering even more value to customers.”

Group 1’s Q3 used sales tick 3.3 percent lower

HOUSTON - 

While contending with the ramifications of Hurricane Harvey, Group 1 Automotive watched its used-vehicle retail sales soften by 3.3 percent year-over-year during the third quarter.

According to its financial report released on Thursday, Group 1 stores in the U.S. turned 26,304 used vehicles during Q3. That’s down from the 27,201 used vehicles that the company’s stores during the same quarter a year ago.

While the unit figure ticked lower, Group 1 managed to keep its gross profit per used vehicle retailed nearly identical. In the third quarter, it was $1,443, while it stood at $1,441 a year earlier.

However in the F&I office, Group 1 sustained a slight drop-off there, too. F&I gross profit on all vehicles retailed dipped 1.4 percent to $1,566; that’s $22 less year-over-year.

The used-vehicle and F&I activities helped Group 1 to generate a Q3 net income figure of $29.9 million, diluted earnings per common share of $1.43, adjusted net income (a non-GAAP measure) of $46.6 million and adjusted diluted earnings per common share (a non-GAAP measure) of $2.23.

The company explained that Q3 adjusted net income and diluted earnings per share exclude approximately $16.8 million of net, after-tax adjustments, or $0.80 per share, for non-core items. Group 1 noted these adjustments primarily consist of costs directly associated with Hurricane Harvey of approximately $9.0 million after-tax, or $0.44 per share; and, franchise right impairments of $5.9 million after-tax, or $0.28 per share.

“While the company’s third-quarter results were negatively affected by both the non-recurring costs from Hurricane Harvey, as well as business disruption for more than a week across our largest revenue-generating market, strong demand for replacement vehicles in September provided significant financial recovery,” said Earl Hesterberg, Group 1's president and chief executive officer. “We expect this recovery to continue for a number of months, as the region continues to rebuild from Hurricane Harvey's widespread impact.

“Our overseas businesses were also positive factors in our third quarter results,” Hesterberg continued. “Although the U.K. new-vehicle market declined roughly nine percent in the third quarter, we significantly outperformed the industry with our same-store new vehicle unit sales rising 2.9 percent. Our used-vehicle and F&I businesses were up almost 10 percent driving a total same store revenue increase of 9 percent on a local currency basis.

“In Brazil, our operations delivered another quarter of profitability, with gross profit up 19.4 percent on a same-store constant currency basis, reflecting continued double-digit growth in used, aftersales and F&I,” he went on to say. “Our combined performance in all three markets delivered record revenues, gross profit, and adjusted earnings for the quarter.”

Editor’s note: More details from Group 1’s third-quarter activities will be highlighted in a future report.

After Q auto, 'energy has been refocused' at Asbury

DULUTH, Ga.  - 

When Asbury Automotive Group announced in July that it was discontinuing the Q auto standalone used-car store business, leadership emphasized this did not mean Asbury was scaling back on used cars.

Not by a long shot.

“With our investments in digital technologies and lead management initiatives, we have reassessed our brick-and-mortar investment in Q auto and made the decision to exit the remaining two locations,” chief operating officer David Hult said in a late-July conference call on Asbury’s second-quarter results.

“With this decision, we are not decreasing our emphasis on used-vehicle sales,” Hult said. “Rather, we are focusing our investments and resources on alternative routes to market that we believe will provide a superior return.

“Our attention to the used-car business is evident by the more-than-500-basis-point increase in our used-to-new ratio this quarter,” he said, referring to Q2.

Three months later, Asbury has been able to take some of the focus that had been on Q auto and shift it elsewhere, including the used-car operations of its core stores and the retailer’s digital processes.

“Naturally when we have a project like that on the side, it is a distraction for some of our leadership team to focus on that business,”Hult said in Tuesday’s third-quarter earnings call. “And there’s also cooperation with our stores from a shared-inventory standpoint.

“Now that the focus is back on our core stores and our core business both from a leadership perspective and keeping the units within the stores, we see this as opportunity to, again, increase our throughput with our current stores,” he said.

Asbury president and chief executive officer Craig Monaghan, whom Hult will succeed on Jan. 1, said beyond the in-store talent, Asbury’s technology team — particularly its digital department — had been putting many hours into Q auto.

Now, “that energy has been refocused and redirected to how we can compete tomorrow in the digital world,” Monaghan said.

“We’ll share more with you in the future about that, but that’s really where that initiative has refocused, on our approach to digital transactions in the future,” Monaghan said during the call. 

As it stands, between 4 percent and 5 percent of Asbury’s sales are done completely online, Hult said.

“We’re continuing to see progression in that area. It is opening up our channels in a lot of respects, but again it’s still to push the traffic back down to the store and (do) the transaction there, whether we’re delivering it at the store or delivering it at the people’s homes,” he said. “Progression has been solid the last few months and it continues to grow in that area.”

Earlier in the call, Hult was asked, given the Q auto shutdown, how Asbury was differentiating itself from its peers when it comes to its digital strategy.

Hult touched on the retailer’s previously discussed omni-channel approach, then noted: “We’re really focused on creating that transaction online, really getting consistent with our processes there and increasing sales that way. Our investment continues. We’re pleased with what we see so far, and see that as a core strength for us. Our goal, instead of creating more expense in brick and mortar, is to really create larger throughput through our stores, with centrally assisting the stores digitally and enhancing the transactions online.”
 

NADA report: Franchised dealers on pace for more workforce records

TYSONS, Va. - 

More workers making more money.

That’s the crux of the latest report from the National Automobile Dealers Association

Employment and payroll at franchised dealerships continued to rise through the first six months of 2017, according to a new midyear report released by NADA.

Officials tabulated that franchised dealerships directly employed 1,134,200 workers through the second quarter of this year, up from a record 1,131,900 in 2016, according to NADA Data 2017: Midyear Report, which provides a biannual financial profile of franchised dealerships, as well as data on employment, payroll and more.

“We expect to see employment at new-car dealerships reach an all-time high at the end of 2017,” NADA senior economist Patrick Manzi said in a news release. “In addition to the direct employment provided by dealerships, more than another million other jobs in local communities are dependent on dealerships.”

The report indicated payroll at franchised dealerships reached nearly $33 billion in June year-to-date, up more than 11 percent compared to the same six months in 2016.

The average compensation for employees at franchised dealerships was $69,784 per year in 2016.

“For the past several years, dealership employees have seen steady increases in their incomes as well as in their total compensation,” Manzi added. “Dealership jobs offer significantly higher compensation than other retail sectors.”