Tag Archive | "third quarter"

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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New-Vehicle Transaction Prices Rise More Than 1% in October


IRVINE, Calif. — Kelley Blue Book reported today that the estimated average new-vehicle transaction price for light vehicles was $34,023 in October, with new-vehicle prices rising $458 from a year ago and $233 from September.

Leading the way were full-size SUVs, high-performance cars, mid-size trucks and vans, the vehicle information site noted. By brand, Chevrolet, Hyundai, Lincoln, Ram and Subaru lead the way in terms of month-over-month and year-over-year price gains.

“These brands had growth from different segments across their lineups, a promising sign given the increasing popularity of SUVs and trucks in the market,” said Akshay Anand, a Kelley Blue Book analyst.

One of the few brands to show a dip in average transaction prices from the prior month (down 3.6 percent) and on a year-over-year basis (down 1.8 percent) was Volkswagen. “In fact, Volkswagen had the largest month-over-month drop as the diesel emissions issue continues to impact the automaker,” said Anand. “Six out of the eight vehicles within its lineup were down from last month, while only the Golf is up from this time last year, potentially reflecting Volkswagen’s need to offer its vehicles at slightly lower prices since consumer perceptions of the brand may be impacted.”

As a whole, Volkswagen Group is down 1.6 percent from September 2015, but up 2.9 percent from last year.

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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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Q3 Used-Car Market Remains Strong, Manheim Reports


ATLANTA — With wholesale used-vehicle prices increasing in September for the fourth consecutive month, wholesale pricing remains one of strength and stability. This brought the Manheim Used Vehicle Value Index — a measure of wholesale prices adjusted for mix, mileage and season — to a reading of 124.8 in September, representing an increase of 2.8% from a year ago.

“Wholesale pricing trends have defied expectations from analysts at the beginning of the year, but used-vehicle values are not defying market fundamentals,” said Tom Webb, chief economist for Cox Automotive. “With pricing up nearly three percent from last September, consumers continue to see the increased value in purchasing used vehicles.”

Despite a bad September employment report, with earnings remaining flat and a decrease in the labor force participation rate, the economic outlook remains solid and the number of job openings is strong — adding to both lender and consumer confidence. Illustrating this, the weakest pricing tiers remained in the $9,000-$11,000 range while luxury cars and SUVs and CUVs showed modest gains.

Compact car wholesale prices were down 5.4% in September compared to the same period last year, and once again remain the only major market segment with lower pricing versus a year ago. Mid-size cars also remained one of the weaker segments, but saw an increase of 2.6% compared with the same time period last year.

Luxury car values had a small gain of 0.5% over the same period last year, and remain weak considering this was also the case for last year’s pricing. The small gain can also be attributed to more efficient re-marketing of cars in this class. SUVs and CUVs rose 3.1% compared with last September, helped by an increase in vehicle miles of travel and lower gas prices. Pickups and vans once again won the top spots, with pickup pricing up a significant 11.8% and vans up a more modest 5.1% on a year-over-year basis.

“Used-vehicle operations — including CPO sales — should be set up well for October given that new vehicle inventory levels are down thanks to a higher sales pace last month,” Webb said. “Supporting the used-vehicle industry’s strength, low initial jobless claims in September and a high  number of open positions per job seeker is giving workers the confidence to borrow and lenders the confidence to lend.”

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