The country’s largest automobile retailer, AutoNation Inc. (NYSE: AN), announced Friday morning that it plans to open five new AutoNation USA stores in 2017 as part of adding stand-alone used car sales and services centers. The company has identified an additional 20 U.S. locations for further expansion.
In addition to the new AutoNation USA stores, the company plans to add 18 AutoNation Collision Centers over the next two years to the 70 it currently owns and operates and expand its AutoNation Precision Parts and Auto Gear businesses. The company also expects to open four additional AutoNation Auto Auction locations over the next two years, starting with centers in Orlando, Florida, and Houston, Texas, in the first half of next year.
CEO Mike Jackson said:
We are pleased to announce the next phase of our comprehensive brand extension strategy, which will provide long-term growth opportunities for the Company. We expect that our investments in this next phase of the Company’s brand extension rollout, which may exceed $500 million in the aggregate, will continue for the next several years. We have built an industry-leading brand, and we remain committed to achieving and sustaining operational excellence, while creating a peerless customer experience and enhanced services throughout the automotive retail sector.
AutoNation plans to implement its One Price, no-haggle policy at all of its existing locations. This includes franchised stores, not just company-owned stores, according to a report at Automotive News. By the end of 2017, all franchised stores are expected to make the change, and company-owned stores are expected to have moved to the One Price program by the middle of next year.
The company’s stock traded down nearly 5% Friday morning, at $43.80 in a 52-week range of $40.45 to $65.51. That is more likely due to a miss on estimated profits reported in the morning as well. The 12-month price target on the stock was $56.33 before these announcements.