U.S. auto retailers may post the highest sales in almost two years

Article by Christian A., on August 29, 2010

The dealerships that remained after General Motors Co. and Chrysler Group LLC shuttered thousands of smaller dealers are expected to post their highest sales in nearly two years.

According to the average estimate of seven analysts surveyed by Bloomberg, AutoNation Inc., the largest dealer group, is expected to post $3.06 billion in second-quarter sales when it reports earnings this week. This would be considered as its highest revenue since the third quarter of 2008.

Meanwhile, Penske Automotive Group Inc. (the second-largest retailer) and Sonic Automotive Inc. (the third-largest) may post the highest sales in two years when they report results on July 29.

Last year, Chrysler and GM said they would close about 2,800 dealerships as they headed towards bankruptcy. This led to the surviving stores being able to sell more vehicles at higher prices.

Ford Motor Co. even closed some locations in urban areas. Earlier this week, a government watchdog pointed out that the closures worsened unemployment. Dealer groups have responded that this cut ailing stores.

Greg Young, Sonic's vice president of finance, said that the remaining stores have been doing significantly better. The average estimate of 5 analysts indicates that Sonic is expected to generate $1.75 billion in second-quarter sales.

Topics: united states, sales

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