AutoNation posted better-than-expected earnings, up 5% in first-quarter profit, due to strong new-vehicle sales.
The company’s net income rose to $73 million, from $69.4 million last year. AutoNation, which owns 260 new-vehicle franchises in 15 states, declared revenue increased 10% to $3.66 billion, due to new vehicle sales. CNW Research stated that total industry new vehicle unit sales increased 7% in the first quarter.
“The renaissance in auto retail is well under way,” CEO Mike Jackson said. “The American consumer has more choices than ever with improved fuel efficiency, better technology, and accelerated product offerings.”
One reason for the rise of new car sales is the fact that drivers have to replace their aging vehicles which they hold on during the recession. The average age of a vehicle in the U.S. is a record 10.8 years, almost two years more than a decade ago. Sales of domestic cars, made by General Motors Co., Ford Motor Co. and Chrysler Group LLC, were up 16%, while luxury vehicles, made by Mercedes-Benz, BMW AG and Lexus, were up 14%. Toyota, Honda Motor Co. and Nissan Motor Co. make up AutoNation’s import segment, which posted a 6% unit sales increase.