What 15th Straight Quarter of Used Sales Growth Did for Public Groups' Bottom Lines
For the 15th straight quarter, the nation’s seven publicly traded dealership groups saw their same-store used-vehicle retail unit volumes increase, according to the latest blog entry from Manheim Consulting’s Tom Webb.
And this, Webb said, together with more operational efficiency, more quickly turning inventory and hearty income in the F&I office, helped push record profits.
Signs of used-car operational improvements were peppered throughout the recent quarterly conference calls from these seven groups (which include CarMax, AutoNation, Penske Automotive Group, Sonic Automotive, Group 1 Automotive, Asbury Automotive and Lithia Motors).
Take AutoNation, for example.
Its same-store used retail revenue for the first quarter climbed 8.6 percent year-over-year and hit $870.2 million. Same-some used retail unit sales jumped 6.7 percent, as the dealer group move 49,201 units.
President and chief operating officer Mike Maroone touched on AutoNation's used-car strides during the group's quarterly call. He emphasized the progress made from bringing in Steve Strader and the efforts made by the new senior vice president of retail operations and his used-car team.
“He and the used-car folks really focused on wholesaling less, retailing more; moving units appropriately; and pricing to market, controlling our discounting; there’s a whole series of executive issues that I think they’ve done an excellent job of working through, and we think there’s even more opportunity in that business in the recovery,” Maroone said.
Maroone later noted how additional training resources and people in the field, along with the effort to acquire the right vehicles at the right time have helped.
“It’s a comprehensive effort and that’s what gives us confidence that we think, going forward, we’ll be able to continue to perform in a good way,” Maroone shared.
AutoNation chairman and chief executive officer Mike Jackson acknowledged the challenges that remain when it comes to supply and demand in the used-car space, but emphasized that the retailer’s used performance has taken “a step forward.”
Jackson was talking specifically about his own company, but the same sentiment can likely be said for much of the dealer group community.
Asbury, for example, has made progress in and entered Phase II of its 121 program, which aims for a one-to-one used-to-new sales ratio.
“Our used-to-new sales ratio was 81 percent for the (first) quarter, as our markets continue to react favorably to the increased availability of pre-owned product,” said Asbury executive vice president and chief operating officer Michael Kearney said during the company’s quarterly call in April.
“The impact of the Asbury 121 Program on our used-vehicle performance is evident when you compare our used-to-new sales ratio of 81 percent today versus the 60 percent range we produced back in 2007 and 2008 time frames.”
Likewise, executives at Lithia were quite pleased with the results of its used-vehicle division, including a 21.5-percent lift in same-store used retail revenue and a 18.5-percent hike in same-store used retail unit sales during the first quarter.