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ReprintsF&I revenue rises at big dealership groups
Rising F&I revenue contributed to soaring profits at the first three publicly traded U.S. dealership groups to report earnings for the latest quarter."These are fantastic results, and I'm extremely pleased with the progress of our F&I team," said Michael Kearney, COO for Asbury Automotive Group Inc., in a July 27 conference call. His company posted a 35 percent gain in F&I revenue from a year earlier as net income more than doubled.
Group 1 Automotive Inc., meanwhile, said its F&I revenue rose 31 percent as profits jumped 27 percent. AutoNation Inc. recorded an 18 percent advance in F&I sales en route to a 29 percent rise in net income.
Of the three, Asbury posted the biggest gain in F&I revenue per vehicle sold.
Asbury said its F&I revenue totaled $30.4 million, while unit sales of new vehicles increased 12 percent, and used vehicles were up 13 percent. Asbury's F&I revenue per vehicle jumped 17 percent, to $1,005.
The company attributed the gain to:
• More training and performance targets for F&I managers.
• Sharing "best practices" among the group's 80 dealerships, such as selling service contracts to service customers.
• Higher sales of aftermarket F&I products.
AutoNation reported on July 22 its F&I revenue per vehicle fell 1 percent for the quarter, to $1,135. The company's 18 percent increase in F&I revenue, to $104.9 million, followed a 20 percent rise in sales of new and used units.
At Group 1, F&I revenue per vehicle was up 6.3 percent to $1,028.
Its 31 percent gain in F&I revenue brought its total to $42.8 million for the quarter and accompanied a 29 percent increase in new and used vehicle unit sales.
For the quarter, Asbury's net income more than doubled, to $12.8 million. AutoNation's profits jumped 29 percent to $47.2 million. Group 1's net income rose 27 percent to $12.8 million,
According to the Automotive News list of Top 125 Dealership Groups, AutoNation is the country's biggest auto retail group measured by new vehicles retailed last year. Group 1 is No. 4, and Asbury is sixth.
No. 2 Penske Automotive Group Inc., No. 3 Sonic Automotive Inc. and No. 9 Lithia Motors Inc. are due to report second-quarter earnings July 29. You can reach Jim Henry at autonews@crain.com.
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