To take advantage of significantly reduced dealership and real estate costs, AutoNation has flipped on the switch for its expansion plans. It can be recalled that earlier this year, CEO Mike Jackson suspended plans for acquisitions and renovations while he waits for the industry to stabilize and the price of dealerships to fall.
But Jackson has decided to put this plan back on track now that it estimates to achieve 13 million in annual US light-vehicle sales. In the first quarter, AutoNation intends to renovate or expand 24 stores (nine of which are priced at over $5 million each).
It also seeks to build 11 new stores, including seven Fiat stores. In an interview with Automotive News last week, Jackson said that he is “very optimistic” with buying stores. Jackson said that store pricing is what spelled the difference.
Last year, Jackson said that AutoNation was looking for acquisitions in 2010 above its $150 million in reported capital expenditures. Jackson now said that pricing had become realistic only in the last few months.
He explained that the gap has narrowed between what a seller hopes to pay and what a buyer will pay. Jackson seeks to have at least one of every brand in each of AutoNation's 25 major markets. [via autonews - sub. required]