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

Article by Christian Andrei, 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

Login or Create new account to add a comment!

Recommended

Nearly a decade after Opel and sister brand Vauxhall introduced the Insignia large family car, these companies are now getting ready to unveil the second generation of this offering from...
by - December 7, 2016
After we caught a glimpse of the revamped Amarok, VW Australia once again wants to give its ute a sinister look inspired by the Mad Max movie franchise. The “Korama”...
by - December 7, 2016
Customers in the European market are known for leaning towards style and with this in mind, Nissan has revealed the special LEAF Black Edition. While the production run of this...
by - December 7, 2016
When Volkswagen unveiled the VW Atlas, it declared that this SUV is being developed for the United States and is set to arrive as a 2018 model. It also unveiled...
by - December 7, 2016
Did you miss the opportunity to get a brand new Dodge Viper? Well, here’s something you don’t want to miss. Dodge has announced a “final call” for orders for its...
by - December 6, 2016
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