With AutoNation Inc.'s five standalone used-vehicle stores breaking even in the past three quarters, the CEO of the country's largest new-vehicle retailer now indicates expansion of that AutoNation USA business is a possibility through new builds or acquisitions.
The second quarter of 2019 marked the first time the AutoNation USA portfolio had broken even since the stores launched in 2017 and 2018 as part of AutoNation's broader brand extension strategy. The AutoNation USA stores then broke even again in the third and fourth quarters.
AutoNation CEO Cheryl Miller told Automotive News last week that she was pleased with the stores' performance. When asked whether the company has plans to expand the number of AutoNation USA stores, Miller said: "We haven't announced any formal plans on next locations, but we're certainly evaluating the entire used landscape."
AutoNation did not release sales figures for AutoNation USA, but AutoNation Chief Marketing Officer Marc Cannon said sales volume has steadily grown each quarter. He said Henderson, Nev., and Phoenix stores "hit their stride" during the past six months.
The company said its same-store used-vehicle sales increased 9.8 percent to 58,467 vehicles in the fourth quarter. Same-store used-vehicle gross profit jumped 21 percent to $88.1 million. Used-vehicle growth helped boost AutoNation's fourth- quarter net income from continuing operations.
Miller told analysts in a call last week that AutoNation wants to get additional sustainable volume through its AutoNation USA stores to ensure long-term viability.
"But we wanted to make sure we have a sustainable path as we look at the next phase of rollout of used broadly," Miller told analysts last week.