AutoNation Inc. saw fourth-quarter earnings rise 31% as the company had stronger used vehicle sales that pushed up overall revenue. The retailer operates the largest network of US dealerships. During the past two years, AutoNation has seen earnings climb, much to do with high used car prices and a pickup in new vehicle sales.
Here’s some perspectives from Mike Maroone, president and chief operating officer, on how used cars did in the fourth quarter…….
- Certified pre-owned vehicle sales went very well for AutoNation. About 32% of its used vehicles sold were CPO, versus about 29% a year earlier.
- The company worked aggressively to acquire used vehicle inventory; that took place internally through increasing appraisals and winning more trades. They’ve worked aggressively on getting the right inventory at the right time and right price.
- Externally, the company’s “We Buy Your Car” guaranteed offer program, and third party partnerships, saw strong performance.
- The company is working on staying disciplined about inventory and being well-positioned for the spring selling season. AutoNation’s used vehicle days’ supply has been at 35 days.
- Dealer staff has been winning trades in the showrooms and using other methods to acquire vehicles as part of its aggressive buyer strategy.
- Off-lease returns have worked well for the company – they’re coming in at a sweet spot of age and mileage.
- Maroone couldn’t think of any real negatives about the market; it is very competitive trying to buy older vehicles and competing to win trade ins. But that’s the way it is – a very competitive business. “We’re very optimistic about the used business and really are continuing to work to make sure that we’re operating at an optimal level,” Maroone said.