The company is taking advantage of the burst of new car sales in the first quarter. US sales have jumped to an annual rate of 14.5 million new cars. Total retail sales for all US auto dealerships rose 7% in the first quarter, while AutoNation’s sales of new cars rose 10%. Other national auto dealers, like America’s CarMart Inc. (NASDAQ: CRMT) and CarMax Inc. (NYSE: KMX) primarily sell used cars.
AutoNation’s unit sales in the first quarter rose 13% year-over-year, up 16% in domestic models, 6% in imports, and 14% in luxury models. The domestic category includes vehicles built by Ford Motor Co. (NYSE: F), General Motors Co. (NYSE: GM), and Chrysler. The import category includes vehicles from Toyota Motor Corp. (NYSE: TM), Honda Motor Corp. (NYSE: HMC), and Nissan Motor Corp. (OTC: NSANY.PK). Luxury models includes cars from Mercedes, BMW, and Toyota’s Lexus brand.
AutoNation could be positioned better going forward than its used car rivals CarMax and America’s CarMart, both of which attracted more cash-strapped buyers during the recession. But used car inventories are falling, prices are rising, and new car dealers are pricing their trade-ins more agressively.
AutoNation shares are up only 0.22% in pre-market trading this morning, at $33.65 in a 52-week range of $30.46-$41.55.
Paul Ausick
Contact [email protected] for any questions or corrections.
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