(Corrects paragraph 3 to show premium-luxury segment accounted
for 46 percent of total new-vehicle income, not revenue)
By Bernie Woodall
Jan 30 AutoNation Inc, the largest U.S.
automobile dealer group, sped by Wall Street earnings
expectations on Thursday on robust sales of luxury cars like
Mercedes-Benz and BMW.
"The shining star really's got to be Mercedes-Benz for
introducing two new products simultaneously at different ends of
the spectrum with the CLA and the S-Class," said AutoNation
Chief Operating Officer Mike Maroone in a telephone interview.
"Demand for those products was extraordinary."
AutoNation said its fourth-quarter income from what it calls
premium-luxury new vehicles increased 28 percent to $102.7
million. The segment accounted for 46 percent of total
The CLA is an "entry-level" vehicle costing about $30,000
and the S-Class sedan is the flagship of Daimler AG's
Mercedes-Benz brand. The average purchase price for an S-Class
sedan is $94,000, according to TrueCar.com.
Mercedes-Benz vehicles accounted for 10 percent of
AutoNation's new-vehicle sales in the quarter, and BMW accounted
for 5.6 percent. Toyota Motor Corp's namesake brand were 18.6
percent of the company's quarterly new-vehicle sales, followed
by Ford Motor Co products at 16.5 percent, Honda Motor
Co's namesake brand at 11 percent, Nissan Motor Co's
Nissan brand at 10 percent.
AutoNation showed net income of $109.4 million, or 89 cents
per share, in the fourth quarter, versus $83.2 million, or 67
cents per share a year ago.
Adjusted income excluding a tax benefit of 3 cents per share
and gains linked to changes in owning property of 4 cents per
share was 83 cents per share and beat analysts' expectations of
76 cents per share, according to a survey by Thomson Reuters
Revenue was $4.52 billion, which missed analysts'
expectations of $4.59 billion, but beat year-ago results of
$4.17 billion. AutoNation is based in Fort Lauderdale, Florida.
CEO WARNS AUTOMAKERS AGAIN
AutoNation Chief Executive Mike Jackson, who used to run the
Mercedes-Benz brand for Daimler in the United States, has been
warning for several months that high inventories can bite into
profits for automakers and dealer groups. He did so again in a
telephone interview on Thursday.
"I'm overall very optimistic, very positive," said Jackson.
"I'm just observing that taking inventories to these levels is
an inefficiency that we should really focus on this year and
bring it back in line. One of the reasons to speak up is to make
sure that we don't end up with even higher inventories."
Jackson fears that automakers, particularly the mass-market
brands, will exceed demand with production, which could cause
them to layer on heavy consumer incentives to move product on
Jeff Schuster, senior vice president of forecasting at LMC
Automotive, said while there should be concern, he is confident
that automakers will be disciplined on incentives, which they
generally have been since the 2008-2010 downturn in the U.S.
"Even if we have a weather-induced slowdown from January,
which I think we will have, I don't think over-inventory is
going to plague the auto industry this year," Schuster said in a
telephone interview on Thursday.
(Reporting by Bernie Woodall; Editing by Jeffrey Benkoe and