Sales of used vehicles at the nation's biggest 100 dealership groups continued to grow in 2002, but at a much slower pace than the year before.
A total of 1.57 million used vehicles were sold by the top 100 groups last year, according to the annual Automotive News ranking. In 2001, the group enjoyed a 17.0 percent increase in used-vehicle sales.
Retailers say heavy use of new-car incentives cut into their used-car volume.
AutoNation Inc., for example, the nation's largest seller of used and new vehicles, says in its 2002 annual report that used-vehicle revenue, on a same-store basis, declined 4.8 percent for the year. That "was in large part caused by continued strong manufacturer incentives," the report said.
Ben Hollingsworth, chairman of Group 1 Automotive Inc. of Houston, says, "You had many people who normally would have been used-car buyers who crossed over because the monthly payments were lower."
Hollingsworth says the policy at his 73 dealerships is to turn used-vehicle inventory every 30 days. That way, the company can react to marketplace and economic changes that affect used-vehicle prices.
"You get hurt if you hold inventory too long," he says.
Seven of the top 10 used-vehicle retailers sold fewer used cars and light trucks in 2002 than in the previous year. Only CarMax Inc., UnitedAuto Group Inc. and Lithia Motors Inc. gained - but all by double-digit percentages.
Group 1 sold 65,698 used cars in 2002, down 3.3 percent from 2001. It ranked No. 6 on the 2002 new-vehicle list and on the used-vehicle list.
The company's first quarter 2003 used-vehicle sales increased 3.3 percent over a year ago.
AutoNation sold 247,365 used vehicles in 2002, down 4.1 percent from 2001, but still 57,265 units ahead of its nearest competitor, CarMax of Glen Allen, Va.
CarMax, which separated from parent company Circuit City in October, sold 190,100 used vehicles in its 2003 fiscal year that ended Feb. 28. That represents a 25.7 percent increase over its previous fiscal year.
The company said in March that it will sell five Mitsubishi stores to make room for its more profitable used-vehicle operations at those locations. CarMax also says it plans to open seven or eight used-car superstores in its 2004 fiscal year that began March 1.