AutoNation posts a 15% increase in total profits in the third quarter of 2012

Article by Christian A., on October 26, 2012

AutoNation Inc. experienced a 15% increase in total profits in the third quarter as higher volumes and record finance-and-insurance income offset a declining new-vehicle margin. AutoNation, the largest retailer in the U.S., posted a net income of $81.6 million in the third quarter. This is higher than the $70.7 million reported during the same period last year.

The operating income increased by 14% to $163.7 million. The revenue increased by 12% to $3.9 billion, mostly driven by a 21% increase in AutoNation’s retail new-vehicle unit sales. CEO Mike Jackson said that its profitability rose in all four of AutoNation’s business sectors, which include new vehicles, used vehicles, parts and service and F&I. AutoNation also posted a remarkably strong 21% climb in finance-and-insurance gross profit.

In a statement, Jackson said that auto industry sales in the third quarter improved considerably as consumers faced more options, had a strong credit environment, and as the supply recovered.

One year ago, prices increased due to shortages in supply as a result of the tsunami in Japan as well as by the new-vehicle profits for AutoNation and other retailers. After import-brand inventory levels returned to normal levels, prices and profits fell in the third quarter this year as expected.

The gross profit for each new vehicle retailed fell by 14% to $2,117. But due to the higher volumes, total gross profits from new vehicles climbed by 5% to $144.7 million. There was a 3% increase in the used-vehicle retail unit sales while the gross profits from retail used vehicles rose by 8% to $72.5 million.

The gross profit per used vehicle rose 4% to $1,589. Meanwhile, the parts-and-service gross profits increased by 4% to $251.2 million. F&I gains provided over half of AutoNation’s increase in total gross profits. F&I gross profits amounted to $147 million, standing for a 20% increase.

If you liked the article, share on:

Comments

Recommended

More efficient, more power and longer range. This is how we could best describe the electric version of the Volkswagen Golf for the 2017 model year. In terms of efficiency,...
by - February 28, 2017
If you think you’re all ready for the new 2018 Audi S4 sedan when it arrives in the United States this spring, then better make sure that your pockets are...
by - February 28, 2017
One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries