Public auto retailers could lose as much as $1.5 million in gross profit for every week Toyota suspends sales on several of its vehicles, an analyst said today.
Toyota Motor Corp. temporarily stopped selling eight models in the United States while it studies a fix for gas pedals that are prone to stick, causing unintended acceleration.
The suspensions “will likely bring significant media attention and put short-term pressure on the public auto retail stocks,” Matt Nemer, a senior analyst for Wells Fargo Securities, wrote in a report.
Nemer estimates the suspension could result in a per-share loss of up to 2 cents per week for the three biggest retailers -- AutoNation Inc., Penske Automotive Group Inc. and Group 1 Automotive Inc. The estimate includes lost sales in the new- and used-vehicle departments, as well as in finance and insurance. Weekly gross profit losses could range from $850,000 to $1.5 million, Nemer said.
Toyota halted sales of some key models, including the 2007-10 Camry and 2009-10 Corolla and the 2005-10 Avalon.
Nemer said Group 1 has the most exposure to Toyota, which accounts for more than a third of retailer's U.S. new-vehicle sales when the Lexus and Scion brands are counted.
Its shares suffered the sharpest drop of any public retailer today, down 6.1 percent to $29.54.
AutoNation is the next most dependent, with 20 percent of its sales from the Toyota brand alone. Nemer lists Penske Automotive's exposure at 19 percent, counting Lexus and international sales.
Asbury Automotive Group's product mix is also import-heavy. Rick Nelson, an analyst with Stephens Inc. in Chicago, said Asbury has more Honda stores than it does Toyota stores.
Nelson said would-be Toyota buyers turned off by the accelerator defect will shop other makes, meaning Honda is likely to be the biggest beneficiary.