FILE PHOTO: FILE PHOTO: Vehicles for sale are pictured on the lot at AutoNation Toyota dealership in Cerritos, California December 9, 2015. REUTERS/Mario Anzuoni/File Photo
July 19, 2021
(Reuters) -AutoNation Inc said it expects strong demand for new vehicles to continue into next year, as low-interest rates and consumer preference for personal vehicles in the pandemic helped the top U.S. auto retailer trounce quarterly earnings estimates.
The company said on Monday sales of new and used vehicles surged 42% and 37%, respectively, in the second quarter.
“Consumers are buying vehicles before they even arrive at our stores. We expect the current environment of demand exceeding supply to continue into 2022,” Chief Executive Officer Mike Jackson said.
The global semiconductor chip shortage has depleted vehicle inventories and forced automakers to cut production, prompting consumers to pay more for cars.
In its latest auto-industry forecast released in June, JD power said the average price of a new vehicle was set to reach a record $38,088 in the first half of 2021, up 10.1% over a year ago. (https://bwnews.pr/3rrjBeP)
Fort Lauderdale, Florida-based AutoNation’s gross profit per new vehicle jumped 89% to $4,157 in the quarter ended June 30, while the gross profit per used vehicle rose 24% to $2,240.
The company had 14 days of supply for new vehicles in the quarter, compared with 49 a year earlier.
Adjusted net income from continuing operations came in at a record $4.83 per share, easily beating a Refinitv IBES estimate of $2.81. Record revenue of $6.98 billion was also higher than expectations.
The company had $1.6 billion of liquidity as of June 30 and said its board had authorized a share buyback worth $1 billion.
AutoNation also said it was on track to open four new stores in the United States in the second half and 12 new stores in 2022.
(Reporting by Shreyasee Raj in Bengaluru and Joe White in Detroit; Editing by Aditya Soni)