AutoNation CEO declares 'epic winter' over, economy thawing
DETROIT (Reuters) - Mike Jackson, chief executive officer of AutoNation, the largest U.S. auto dealer group, said on Wednesday he was bullish on auto sales and the economy in general now that what he called an "epic winter" is over.
"I'm happy to declare the epic winter of 2014 officially over," said Jackson on CNBC. "Business in the last 10 days of March was simply phenomenal, and that follows 10 weeks of very quiet showroom traffic and very quiet sales.
"I think this is final proof that this epic winter of 2014 really did disrupt the entire economy."
On Tuesday, automakers said March sales rose 5.7 percent from a year earlier, well above expectations of a 2 percent increase. This translates into an annualized selling rate of 16.4 million vehicles.
"This is confirmation that the consumer is coming out of hibernation," Jackson said.
Monthly auto sales are seen as an early indicator of consumer spending, particularly for big-ticket items. Sales of those products are often tied to the confidence consumers have in the economy and of being able to hold onto their jobs.
Jackson said all aspects of Fort Lauderdale, Florida-based AutoNation's customer business, including new cars, used cars and automotive service, were down before the last third of March.
He also said he expected U.S. auto sales this year to top 16 million for the first time since pre-recession 2007, when they were 16.1 million.
For the 10 years that ended in 2007, auto sales averaged 16.7 million vehicles, then bottomed out at 10.4 million in 2009 and have been steadily gaining since.
LMC Automotive analyst Jeff Schuster said on Wednesday that the industry research firm was keeping its forecast for the year at 16.1 million new vehicles.
"If we get a couple more months like March, then that may change things," Schuster said in a telephone interview.
Jackson said pent-up demand from consumers who have been delaying new-vehicle purchases during economic uncertainty and a cold winter played into the strength expected for auto sales in the coming months.
Americans are driving older cars and trucks, on average 11 years old, than ever before.
AutoNation said it had sidelined all of the cars in the General Motors Co (GM.N) recall several weeks ago. The automaker has recalled 2.6 million vehicles that potentially have faulty ignition switches.
An AutoNation spokesman said on Wednesday that those cars were a small part of the company's business, at less than 100 vehicles. AutoNation sold about 205,000 used and 293,000 new vehicles in 2013.
(Reporting by Bernie Woodall; Editing by Lisa Von Ahn)