FORT LAUDERDALE, Fla. -- AutoNation Inc. will scale back its dealership acquisition ambitions as it earmarks $500 million for building used-car stores under the AutoNation USA brand and adding collision centers and auctions.
AutoNation CEO Mike Jackson confirmed to Automotive News that the wide-ranging brand-extension strategy announced Oct. 28 means a change to the company's acquisition strategy. AutoNation, the country's largest new-vehicle retailer, had been on a two-year streak of making major acquisitions. It even entered a new market, New York, this year.
"We certainly don't have the desire or the capital" to expand beyond the current geographic footprint, Jackson said. "Unquestionably, our primary focus is going to be building and extending the AutoNation brand. We'd rather do this than a new market."
But, he added, "We're not going dark on acquisitions."
AutoNation will continue to look for dealership acquisitions that fit its current footprint -- tuck-ins or dealerships that represent brands missing from the company's portfolio in an existing market, Jackson said.
On the same day that it revealed its brand-extension strategy, AutoNation said that it had acquired a BMW store in San Diego and a Jaguar-Land Rover store in Bethesda, Md. Combined, those acquisitions are expected to bring $140 million in annual added revenue.
The company also said that it was awarded new points for BMW, Jaguar and Land Rover stores, expected to open in 2018, that will generate $280 million in annual revenue once fully operational.
In total in 2016, AutoNation has acquired dealerships and been awarded points that represent 49 new franchises expected to generate about $1.5 billion in annual revenue once fully operational, said Jon Ferrando, AutoNation's executive vice president for corporate development and human resources.