Business

Autonation says half of cars arriving at dealerships have been sold

According to AutoNation, the country’s largest auto retailer, the tight supply of new and used cars, which has caused car sales to fall and drive prices up, has not eased off and is likely to last into this year, according to AutoNation. , the largest auto retailer in the country.

Half of all new Chevrolets, Fords, Toyotas and other major brands AutoNation says lots arriving at dealerships over the next 90 days are already sold out. The market is even tighter for luxury cars: Nearly three-quarters of the cars arriving at dealerships over the next three months will be “reserved” – meaning a customer has already paid a deposit. and is waiting to buy a car as soon as it comes back. .

“This shortage of inventory is bound to happen in the first half,” says AutoNation CEO Mike Manley. “I hope we will see some improvement in the second half.”

Selling cars before they even arrive at the assembly plant is a dramatic change from the industry’s traditional practice of stocking dealers with hundreds or even thousands of cars that could wait months. before they are sold. It also means that automakers will have a long way to go in making new vehicles available to dealers.

The shortage dates back to the early days of the pandemic, in 2020, when auto factories were closed for nearly two months. The problem is compounded by a shortage of computer chips, which has forced manufacturers over the past 12 months to temporarily shut down factories for weeks.

The tight supply has allowed dealers to sell cars at their full list price, or even higher.

That higher price helped AutoNation post record revenue in the final quarter of 2021, the company said on Thursday. The company reported a profit of $387 million, more than double its profit a year earlier. Revenue grew 14 percent, to $6.6 billion.

Profits rose despite a 20% drop in new car sales to 57,601, reflecting higher prices. Sales of used cars, the price of which have also increased significantly, increased 21% to 74,442.

Manley said it is difficult to predict whether AutoNation will be able to maintain such high margins this year. Vehicle supply and opportunities to increase new car sales are highly dependent on whether the shortage of computer chips improves, as automakers are hoping. The Federal Reserve has also indicated that a rate hike is likely, which will increase the cost of financing car purchases.

“The profitability that we can grow puts us in a good position,” he said. “But one thing I don’t want to predict is what’s going to happen across the industry, because you have so many moving pieces.”

https://www.nytimes.com/2022/02/17/business/autonation-cars-dealers.html Autonation says half of cars arriving at dealerships have been sold

Fry Electronics Team

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