Tag Archive | "AutoNation"

AutoNation Promotes Berman to President


FORT LAUDERDALE, Fla. — AutoNation Inc. announced promotions for William “Bill” Berman, Marc Cannon and Donna Parlapiano.

A 30-year auto retail veteran who had served as executive vice president and COO since 2015, Berman was named president and COO. Mike Jackson remains the company’s chairman and CEO.

“Bill is an outstanding and exceptional leader whose proven track record and ingenuity are vital for the next phase in AutoNation’s history,” Jackson said. “He will continue to lead all operational functions, including the recently announced AutoNation brand extension strategy.”

Cannon and Parlapiano, also 30-year industry veterans, have both been promoted to the role of executive vice president. Cannon had served as senior vice president of communications and public policy and CMO. Parlapiano was senior vice president of franchise operations and corporate real estate.

“Marc and Donna, along with Bill, are key to AutoNation’s continued growth and the implementation of our strategic brand extension initiatives,” Jackson said. “With this expanded executive team, AutoNation is well positioned for a successful future.”

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Former AutoNation Direct Head Joins CU Direct


ONTARIO, CALIF. — CU Direct today announced the appointment of Ron Frey as chief strategy officer of its automotive solutions. He joined the company this month.
Frey will oversee the planning and direction of automotive solutions as it relates to product and market expansion. This includes oversight of existing products, including CUDL, a credit union auto financing platform, and AutoSMART, an online vehicle-shopping site for the credit union industry.

“Ron’s expansive leadership, partnered with strategic planning, has led him to succeed in implementing cutting-edge technology solutions,” stated Tony Boutelle, president and CEO of CU Direct. “We are excited to have him join our team, as we continue to evolve our innovative automotive products to better serve our 1,000 credit unions and more than 12,000 dealer partners.”

Before joining CU Direct, Frey spent 30 years serving in the automotive and credit union industry. His most recent position was chief strategy officer and president of AutoNation Direct. He has also served as CEO of Autoland and COO of TrueCar.

“I am pleased to be joining the CU Direct Team, where I can leverage my background in technology innovation, deep automotive experience and credit union experience,” said Frey. “I look forward to digging in and looking for ways to bring innovation and value to our credit unions and dealer partners.”

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AutoNation’s F&I Operations Posts $1,538 Per-Copy Average for 2015


FORD LAUDERDALE, Fla. – AutoNation’s F&I operations, or what the group refers to as Customer Financial Services, lived above $1,500 in F&I gross profit per vehicle retailed (PVR) in 2015, with the business unit’s full-year revenues rising by $100.5 million from 2014.

The group’s F&I operation’s full-year PVR average was $1,538, up $124 from 2014. For the fourth quarter, the business unit’s PVR average came in at $1,556, up $109 from 2014’s end-of-year quarter.

Total F&I revenue for 2015 increased 13.5% from a year ago to $846.1 million. For the fourth quarter, revenues increased 14.4% from the year-ago period to $210 million.

The nation’s largest dealer group posted full-year revenue of 20.9 million, up 9% from the prior year. Total gross profit was $3.3 billion, up 9% from the year-ago period. Operating income for the full year was $873 million, an increase of 6% over the prior year.

“Our primary assumption for 2016 industry new-vehicle unit sales is above 17 million for the year,” said Mike Jackson, the group’s chairman, CEO and president.

For the fourth quarter 2015, revenues totaled $5.3 billion, up 6% from the year-ago period. Total gross profit was $812 million, up 4% from the year-ago period, while operating income fell 12% to $200 million.

Retail new-vehicle sales for the fourth quarter increased 4% from a year ago to 86,740 units. For the full year, the dealer group bested 2014 sales by more than 21,000 units for a total of 339,080 units sold.

“The fourth quarter industry sales environment was more push than pull, resulting in significant new- and used-vehicle margin declines on a combined basis of $217 per vehicle, which is 11% lower than the fourth quarter of 2014,” Jackson noted. “During the quarter, we experienced particular weakness in premium luxury, which had a significant impact on our fourth quarter financial results.

“We have begun and will continue through the first quarter to take necessary steps to align our cost, inventory and pricing strategy to the current market,” he added.

On a same-store basis, gross profit for variable operations was $450 million in the fourth quarter, down 4% from the year-ago period. Variable gross was $3,350 on a per vehicle retail basis, a decrease of $125 from the prior year, while new and used same-store unit volume was flat compared to the year-ago period.

Additionally, new-vehicle revenue for the fourth quarter was $3 billion, a $61 million increase from a year ago.

Jackson noted that 2015 was a historical year for AutoNation, as the group celebrated the sale of its 10 millionth vehicle. “We implemented our industry-leading recall policy,” he added. “We acquired 51 franchises with approximately $1 billion in annual revenue, and we built our brand and kicked off our drive pink campaign from coast to coast.”

Asked if the auto finance environment will remain a key driver of sales — particularly with a million more off-lease vehicle returning to the market — Jackson responded, “I see absolutely no sign of difficulties in auto finance.”

“I first think on the consumers’ commitment to pay for the car loans, whether it’s lease or finance,” he added. “It’s unwavering. So no alarm bells there.”

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Recalled Cars Create A Costly Problem for U.S. Auto Dealers


Honda Motor Co’s order that its U.S. dealers stop selling some 2.2 million of the automakers’ most popular models is compounding financial and regulatory headaches for car dealers stuck with millions of vehicles that have potentially hazardous air bags or other safety defects, reports Reuters

With the recalls affecting Honda vehicles dating back several years, used-car dealers are facing increased pressure. It is legal under federal law to sell used cars with unrepaired safety defects that are subject to recall, but dealers that operate under franchises with manufacturers could be violating those agreements.

It is illegal to sell new cars that are subject to a recall under federal law.

Because some used-car dealers operate independently of any manufacturer, the growing number of used cars that need safety repairs is creating divisions among dealers. The National Highway Traffic Safety Administration says this difference creates a “safety loophole.”

John Isaacson, a Honda dealer in Auburn, Maine, said he was hit by three recalls the same day, but would respect Honda’s ban. “If people are selling these with open recalls, customers get mad,” Isaacson told Reuters. “Over time, it’s not good for business.”

Regulators have taken steps to address sales of used cars subject to safety recalls.

In a settlement last month with General Motors Co and two dealer groups, the Federal Trade Commission warned automakers and dealers not to claim that used vehicles sold as “certified pre-owned” cars had undergone comprehensive inspections if repairs required under a recall had not been done.

“Companies touting the comprehensiveness of their vehicle inspections need to be straight with consumers about safety-related recalls,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement.

As in Honda’s case, manufacturers sometimes issue a “stop sale” on models subject to recall and can penalize their franchise dealers if they sell such cars.

The head of the California New Car Dealers Association, Brian Maas, said one of his members had 15 percent of his inventory affected by the Honda recall.

However, dealers outside the new vehicle franchise system, whether independents or chains such as CarMax, the largest U.S. used-car retailer, can sell such cars.

AutoNation Inc, the largest new vehicle dealer group in the United States, has said it will not sell a new or used vehicle that needed repairs under a recall, and Chief Executive Mike Jackson is calling on rivals to do likewise.

In the meantime, Jackson told Reuters, the policy is proving costly, in part because the chain has to stock more vehicles to make up for the roughly 16 percent of inventory it cannot sell.

AutoNation, with its huge network of dealerships, can “afford to do the right thing,” said Kelley Blue Book analyst Rebecca Lindland. Smaller dealers need to turn cars quickly and cannot afford dead inventory.

Honda has said parts to repair the Takata airbags will not be ready until late summer.

CarMax says it is transparent about recalls on its used cars, including a link on each car’s listing on the website to search for open recalls. Carmakers do not allow CarMax to perform recall repairs, so customers are “best positioned” to get repairs at franchised dealers after purchase, the company says.

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AutoNation Posts $146 Q3 Increase in F&I Per-Copy Average


FORD LAUDERDALE, Fla. — Strong performances in all of AutoNation Inc.’s business sectors — particularly the group’s F&I operations, which continued to live above $1,500 per copy during the period — drove record third-quarter results for the nation’s largest dealer group.

While F&I accounted for 4.3% of the company’s $5.1 billion in same-store revenue, F&I generated 27.6%, or $222 million, of AutoNation’s $803 million total same-store gross profit for the quarter. That’s up $26 million over the previous year.

The group’s F&I operations also increased its F&I profit per vehicle unit (PVR) average by $146 from a year ago, with the department averaging $1,549 per copy.

“We are pleased with our new-vehicle PVR performance for the quarter,” said Bill Berman, COO of AutoNation, during the group’s Oct. 28 third-quarter investor call. “We expect a sequential increase in PVRs in the $200 range due to the seasonal mix toward Premium Luxury.”

The company posted total revenue of $5.4 billion, up from $4.9 billion in the year-ago quarter. Net income from continuing operations rose 11% from a year ago to $118.5 million.

New-vehicle sales increased 5% from a year ago to 87,407 units, with gross profit on a per vehicle retail basis staying relatively flat from last year’s $1,877 average.

Used vehicles, however, did not see the same improvement thanks to the open safety recall policy the group announced in early September. It led to a slight 275-unit drop in sales during the quarter, with used-vehicle sales totaling 55,875 units. Gross profit on a per vehicle retail basis decreased 7% from a year ago to $1,509.

“… We set an auto retail industry standard and decided not to sell, lease or wholesale any new or used vehicle that has an open recall,” Berman said. “As of September, 30.6% of our inventory, which represents less than 2% of our new-vehicle inventory and approximately 16% of our used-vehicle inventory, was not available for sale due to open recalls.”

“Our used-vehicle sales were slowed by our recall policy and we expect to see an impact in the fourth quarter as well,” he added.

Officials also commented on AutoNation’s July decision to drop TrueCar as one of its third-party lead providers, with Berman noting that moving away “from less profitable providers” helped offset new-vehicle PVR pressures.

“New-vehicle PVRs from our self-generated sales, including Customer Financial Services, are approximately $800 higher than new vehicle PVRs from third-party sales,” he said.

In the third quarter, the AutoNation Express website generated more than 25% of the company’s unit sales. Sales from third-party lead websites represent less than 9% of the company’s unit sales, officials said.

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AutoNation Posts $146 Q3 Increase in F&I Per-Copy Average


FORD LAUDERDALE, Fla. — Strong performances in all of AutoNation Inc.’s business sectors — particularly the group’s F&I operations, which continued to live above $1,500 per copy during the period — drove record third-quarter results for the nation’s largest dealer group.

While F&I accounted for 4.3% of the company’s $5.1 billion in same-store revenue, F&I generated 27.6%, or $222 million, of AutoNation’s $803 million total same-store gross profit for the quarter. That’s up $26 million over the previous year.

The group’s F&I operations also increased its F&I profit per vehicle unit (PVR) average by $146 from a year ago, with the department averaging $1,549 per copy.

“We are pleased with our new-vehicle PVR performance for the quarter,” said Bill Berman, COO of AutoNation, during the group’s Oct. 28 third-quarter investor call. “We expect a sequential increase in PVRs in the $200 range due to the seasonal mix toward Premium Luxury.”

The company posted total revenue of $5.4 billion, up from $4.9 billion in the year-ago quarter. Net income from continuing operations rose 11% from a year ago to $118.5 million.

New-vehicle sales increased 5% from a year ago to 87,407 units, with gross profit on a per vehicle retail basis staying relatively flat from last year’s $1,877 average.

Used vehicles, however, did not see the same improvement thanks to the open safety recall policy the group announced in early September. It led to a slight 275-unit drop in sales during the quarter, with used-vehicle sales totaling 55,875 units. Gross profit on a per vehicle retail basis decreased 7% from a year ago to $1,509.

“… We set an auto retail industry standard and decided not to sell, lease or wholesale any new or used vehicle that has an open recall,” Berman said. “As of September, 30.6% of our inventory, which represents less than 2% of our new-vehicle inventory and approximately 16% of our used-vehicle inventory, was not available for sale due to open recalls.”

“Our used-vehicle sales were slowed by our recall policy and we expect to see an impact in the fourth quarter as well,” he added.

Officials also commented on AutoNation’s July decision to drop TrueCar as one of its third-party lead providers, with Berman noting that moving away “from less profitable providers” helped offset new-vehicle PVR pressures.

“New-vehicle PVRs from our self-generated sales, including Customer Financial Services, are approximately $800 higher than new vehicle PVRs from third-party sales,” he said.

In the third quarter, the AutoNation Express website generated more than 25% of the company’s unit sales. Sales from third-party lead websites represent less than 9% of the company’s unit sales, officials said.

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