Automotive retailer AutoNation continued riding consumers’ heightened demand for both new and used vehicles in the second quarter, marking its fifth consecutive quarterly record for profitability.
The Florida-based company said on Monday (July 19) that new vehicle sales increased 42 percent compared to the second quarter of 2020, and rose 12 percent compared to two years ago. Likewise, used vehicle sales increased 37 percent compared to last year and 32 percent compared to the second quarter of 2019.
AutoNation owns and operates over 300 automotive retail locations across the U.S., though many are not marketed with the AutoNation brand. Same-store revenue reached a record $7 billion in the three months ending June 30, up 54 percent compared to 2020 and 33 percent compared to 2019.
If predictions hold true, the $8 billion company could see more record quarters in the future. Mike Jackson, CEO of AutoNation, said he expects demand to continue outpacing supply for new vehicles at least into 2022, with consumers’ preference for personal transportation aligning with lower interest rates.
AutoNation also opened a new branded retail location in San Antonio, Texas in the second quarter, with the site becoming profitable in its first full month of operation.
The company plans to open four additional AutoNation USA stores in the next six months and 12 more in 2022. The goal is to have over 130 AutoNation USA locations across the country by the end of 2026 in an attempt to capture more of the used vehicle market. Still, Jackson noted that consumers are utilizing AutoNation’s digital platforms, with many buying vehicles online before even arriving at a store.
AutoNation said it earned $4,157 per new vehicle sold, up 130 percent compared to the second quarter of 2019, and $2,240 on each used car, up 53 percent versus two years ago.
In a televised interview on CNBC, Jackson said that even in an environment where all automotive retailers will likely see a boost after COVID-19, AutoNation’s performance is “outstanding” because of the power of its brand, its focus on customer experience and its digital platform capabilities.
The CEO also noted that his bullish foresight last year led AutoNation to bolster its used vehicle stock, which has paid off as used car prices have soared over the last several months. The U.S. Bureau of Labor Statistics said last week that used car and truck prices have jumped 45 percent over the last year, as new cars are hard to come by amid a chip shortage.
Still, Jackson said that vehicle manufacturers “have made a heroic effort to restart production and keep it as high as they can.” Shipments to AutoNation are double what they were a year ago, and only 6 percent behind where they were in 2019.
“But demand is far higher,” Jackson said. “And with the disruption from microchips, they’re doing everything they can,” including prioritizing which vehicles get the chips in order to build what people want to buy. “There could be some profound lessons for the industry coming out of this horrific, awful, mind-blowing pandemic period,” he added.