Group 1 Automotive saw a 2.2-percent bump in its used vehicle revenues during the third quarter, thanks to higher unit sales.

When eliminating for the effects of exchange rate fluctuations, i.e. adjusting for constant currency, that increase was 4.8 percent.

Consolidated results (representing the company’s U.S. and international operations) for the three months ended Sept. 30 show that Group 1 retailed 33,012 used units, a 1.6-percent increase from the same period a year ago.

During a conference call with investors, president and chief executive officer Earl Hesterberg said the average used-vehicle selling price increased 0.6 percent (3 percent on a constant currency basis. Used-vehicle retail gross profit increased 2.9 percent (1.1 percent on a constant currency basis).

In the U.S., Group 1 retailed 27,201 used units in the third quarter, down 1.7 percent from a year ago. But for the first nine months of the year, U.S. used units sales were at 80,888, up 1.6 percent year over year.

Gross profit per used vehicle was $1,441 in the third quarter — down slightly from last quarter but with what the company anticipated for the latter half of the year.

Hesterberg noted that U.S. used-vehicle inventory stood at 13,500 units, representing a 33-day supply. As far as units under a stop sale, he said that was less than 4 percent of used inventory.

Responding to a question from an investor later on in the call, Hesterberg said the increase in used supply does put some pressure on margins.

“But the good news is, the used-vehicle market appears to be quite strong, even in a market like Oklahoma, where new-vehicle sales were down 18 percent but used were down only 2 percent to 3 percent, and some months the market is still somewhat flat on used. But yes, there is more supply, which will give us some volume opportunity, but will probably have a little bit of margin trade-off.”

Another investor asked what Group 1 was seeing in terms of leasing, given that the industry sits north of 30-percent lease penetration and is bracing for a flood of end-of-term vehicles to begin hitting the market.

“My impression is that OEMs are starting to back off or slow down a little bit on leasing,” Hesterberg said, adding that “leasing is not as big for us because of our geographic concentration in the South Central U.S., where it’s about 17-percent leasing, whereas the industry is, as you say, closer to 30 percent. So it’s not the same concentration for us, because leasing is quite heavy in the northeastern U.S. and California.

“But with used-car values likely having peaked sometime in the past, my impression is the OEMs are starting to become a little more prudent about how aggressive they get in pushing higher levels of leasing.”