Asbury Automotive Inc. has put opening more Q auto used-vehicle stores on hold this year while it works to turn a profit at its three existing stores.
Asbury launched its Q auto brand last year, opening the first of three stores in June in Brandon, Fla. The second and third stores opened in the fall, also in Florida.
Together, they lost the equivalent of 4 cents a share in the fourth quarter and 10 cents a share in 2014, Asbury CFO Keith Style said last week. He estimated a loss of 4 to 6 cents a share for Q auto in the first quarter of 2015.
Startup losses were expected, but now it's time for the stores to prove themselves, Asbury CEO Craig Monaghan said. "There's nothing at Q if it can't sell a used car and make money," he said. "Right now, we are 100 percent dialed in on: Let's make money in these three stores. It's our entire effort."
Results thus far are "very much in line with expectations," he said. He is optimistic about Q auto's potential as a business and as a learning lab for new ways to sell vehicles.
Asbury is operating small, medium and large Q auto stores in varying types of markets. The stores operate under a one-price model. A single employee using a tablet aims to handle the sales transaction all the way through finance and insurance.
"We're learning a tremendous amount," Monaghan said. "Some of what we learn is good; some of what we learn are things we don't need to be doing going forward."
If the stores become profitable, Asbury can turn to other goals, such as adding more stores, Monaghan said.
The Q auto stores don't have to be making money by year end, he said. But the window for proving out the concept is much closer to one year than three years.
"If we find out we're pounding our heads against the wall, at some point, we will stop," Monaghan said. "But we're not going to quit early."