Asbury Automotive Group is content with its dealership portfolio, so executives say they’re using these early months of economic recovery to focus on retiring debt and streamlining dealership technology instead of aggressively buying stores.
“We really like our portfolio mix. We like our geography. We like the density,” CEO Charles Oglesby said today in an Automotive News interview with company executives after Asbury posted a 35 percent increase in third-quarter earnings.
If the opportunity arises, Asbury may purchase a store, but its emphasis lies elsewhere, Oglesby said.
“I wouldn’t say that we’re going to be aggressive,” he said.
Instead, Asbury’s board of directors has said the company can spend up to $30 million to retire debt or purchase some of the $150 million in properties the company is currently leasing, CFO Craig Monaghan said.
Asbury has restructured over the past year, cutting corporate staff, eliminating regional management and moving its headquarters to suburban Atlanta from New York. The restructuring is almost complete, Oglesby said.
But the company’s move away from a regionally managed structure now includes streamlining technology and processes at dealerships, as big-box retailers such as Wal-Mart Stores Inc. and The Home Depot Inc. have done, Monaghan said.
For instance, Asbury hopes to integrate all software used during a retail transaction. Right now, a salesperson may log in separately to access a customer’s credit score, look up the value of a trade-in and check new-car details, Monaghan said.
Asbury’s goal? “The person who’s helping you with the sale logs in once with one password into one system,” he said.
Asbury also hopes to finish installing a companywide payroll system by the end of the year, COO Michael Kearney said. When the dealership group began restructuring last fall, its stores used one of four systems.
Asbury ranks No. 6 on the Automotive News list of the top 125 U.S. dealership groups, with sales of 83,822 vehicles to individuals in 2008. It has 81 stores.
Reuters contributed to this report