When AutoNation Inc. (NYSE: AN) CEO Mike Jackson stepped into the role back in 1999, among the first things he did was get the company out of the used-car business, closing 29 of the company’s giant used-car stores and converting the rest to new-car dealerships. Last year, AutoNation opened new used-car stores under the name AutoNation USA and plans to open more this year.
The reversal is part of a Jackson-led brand extension strategy in which the company has invested about $1 billion so far. In addition to getting back into the used car business, AutoNation is adding an online shopping component, a parts business called AutoNation Precision Parts, and a deal to service self-driving cars from Alphabet’s Waymo.
AutoNation is already the country’s fifth-largest collision repair shop and owns six distribution centers across the United States.
Jackson will remain as CEO until a successor is named and will then transition to executive chairman. In this morning’s announcement, the company noted:
Mr. Jackson took a fragmented group of dealerships with legacy regional names, implemented industry-leading, customer-friendly common practices, and rebranded them with the AutoNation name, creating a highly successful and recognizable brand. AutoNation has been the number one automotive retailer for the last two decades. No other automotive retailer has been able to replicate what Mr. Jackson accomplished at AutoNation. In July of this year Mr. Jackson was inducted into the Automotive Hall of Fame.
Lead independent director Michael Larson said:
Not only is Mike Jackson an inspirational and visionary corporate leader who is personally responsible for many automotive firsts, he’s been the respected voice of the automotive industry for the last 20 years. AutoNation’s Board will initiate its search for the next CEO who can take the baton from Mike and lead AutoNation into its next phase of continued growth and success.
Two internal candidates who are likely to get a look are current Chief Operating Officer Lance Iserman and executive vice-president of customer care, Scott Arnold. Both have played integral roles in developing and executing Jackson’s brand extension strategy. Having started down this path it seems fairly certain the AutoNation will want to continue, so even if it’s someone from outside, the board is probably not looking for a turnaround specialist.
AutoNation’s stock traded up about 0.5% at $43.31 just before the noon hour Wednesday. The stock’s 52-week range is $42.87 to $62.02 and the consensus price target is $52.13.