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AutoNation Profits Down 16% | DrivingSales News

AutoNation Reports 16 Percent Reduction In Profit

January 28, 2016 1 Comment

The largest auto group in the USA recently reported their fourth quarter numbers and vehicle margins were down on a combined basis, $217 per vehicle.

AutoNation has reported their fourth quarter results and the organization saw a 16 percent reduction in overall profit. During the same period in Q4 of 2014, AutoNation reported $117 million in profit compared to $107 million in profit for Q4 of 2015. According to a company press release, AutoNation indicated costs associated with fallout from the Volkswagen diesel emissions crisis. In a company press release AutoNation reported, “Adjusted net income from continuing operations for the fourth quarter of 2015 excludes non-cash impairment charges related to franchise rights associated with certain of our Volkswagen stores of $9.6 million after-tax, or $0.09 per share.”

Also speaking about the latest reported from the nation’s largest automotive retailer was company CEO Mike Jackson who said in the release, “In the fourth quarter, new and used vehicle margins on a combined basis declined by $217 per vehicle retailed, or 11 percent, as compared to the fourth quarter of 2014. As of year-end, our new vehicle inventories increased 13 percent on a same store basis, as compared to the prior year, driven by a 49 percent increase in Premium Luxury inventories. 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.”

The reporting from AutoNation and words from Jackson come just days after the CEO spoke about so-called “plateauing” in retail auto for 2016 and concerns about automaker stair-step plans. However, in the latest company press release Jackson added, “In 2016, we expect industry new vehicle unit sales will again exceed 17 million.”

What is your impression of AutoNation’s direction as a group? Do you think auto sales will hit over 17 million again this year, and if they do, where will they go from there?

About the Author:

The DrivingSales News team is dedicated to breaking the relevant and the tough stories affecting car dealers. Have questions for DrivingSales News? Reach the team at news@drivingsales.com.

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