AutoNation new sales up while gross profit per unit lags

AutoNation finished 2015 off on a strong note as new-vehicle sales for the month of December, the fourth quarter and the full year were all up for the dealer group.
New sales increased by 9 percent year-over-year, coming to a total of 35,962 new vehicles in December.
For Q4, AutoNation retailed 89,764 vehicles for an increase of 6 percent when compared to the fourth quarter of 2014.
Lastly, the dealer group sold 343,753 new vehicles, outpacing 2014 by 7 percent.
And though the automaker finished the year off on the upswing for sales, AutoNation management expects to report a downturn in gross profit per vehicle when its full Q4 financial results are announced in January.
The dealer group currently expects to report a drop in both new and used gross profit per vehicle retailed in the range of $250 to $200 when comparing fourth quarter results to Q4 of 2014.
"The fourth quarter industry sales environment was more push versus pull. As a consequence, we expect to report significant margin declines for the fourth quarter in both our new and used retail unit sales,” said Mike Jackson, chairman, chief executive officer and president at AutoNation. “We have begun, and will continue through the first quarter, to take the necessary steps to align our costs, inventory, and pricing strategy to adjust to the current market. In 2016, we expect industry new-vehicle unit sales will continue to exceed 17 million.”
Taking a more in-depth look at the automaker’s new-car performance in December, the impressive new sales number of over 35,000 for the month can be contributed in part to significant retail discounts, AutoNation management pointed out, especially in the premium luxury segment.
New-car sales for the group’s operating segments in December break down as follows:
- 10,985 for domestic, up 16 percent year-over-year
- 15,985 for import, up 9 percent versus December 2014
- 8,992 for premium luxury, up 2 percent from December 2014
The same-store results also showed new-car sales increases. On a same-store basis, new sales spiked by 5 percent in December year-over-year.
Fourth quarter new retail sales broke down like this:
- 27,405 for domestic, up 10 percent versus fourth quarter of 2014
- 41,033 for import, up 4 percent year-over-year
- 21,326 for premium luxury, up 4 percent versus fourth quarter of 2014.
On a same-store basis, Q4 sales were up 3 percent year-over-year.
Lastly, check out the full-year new sales breakdown below:
- 107,356 for domestic, up 10 percent from 2014
- 161,108 for import, up 3 percent versus full-year 2014
- 75,289 for premium luxury, up 14 percent from 2014
On a same-store basis, full-year new sales spiked by 5 percent.