Forecasters predict strong sales of new light vehicles this year, possibly as high as 14 million units. But executives representing six major dealership groups -- five of them publicly held and one privately owned -- say they won't neglect their used-vehicle business, regardless of what happens with new cars and trucks.
"To be a good retailer you've got to be a good used-car merchandiser," says Mike Maroone, COO of AutoNation Inc., the nation's largest dealership group. "We've got a big appetite to continue to grow the used-car business."
The executives' commitment to used vehicles is understandable. After all, used vehicles were there when dealers needed them most:
-- Used cars and trucks kept dealerships afloat when new-vehicle sales tanked during the worst of the recession.
-- Certified used vehicles filled gaps in new-car inventories last year when production cutbacks strangled the new-car supply after the earthquake in Japan.
-- Old high-mileage used vehicles were a source of profits when dealers started selling the vehicles on their lots instead of at wholesale.
Having strong used-vehicle sales allows dealerships to offer more money on trade-ins, which boosts consumers' ability to purchase a new car and yields more used-vehicle inventory for their dealerships, the executives say. It's a virtuous circle.
"If new goes up and used goes down it's hard to get ahead in the business. You've really got to drive both segments," Maroone says.