Used Car Sales Improve
June ended a strong quarter for auto sales, both new and used.
AutoNation Inc.'s 2010 second quarter used retail vehicle revenue increased 28 percent compared to the year-ago period, as retail unit sales increased 20 percent and revenue per vehicle retailed increased 7%. AutoNation's new vehicle unit sales increased 20 percent.
"We continue to see a solid automotive recovery going forward." said AutoNation CEO Mike Jackson.
Group 1 Automotive Inc. reported same-store total revenues increased 25 percent compared to the prior-year period, primarily reflecting a 26.5 percent increase in new-vehicle sales and a 31.7 percent increase in used retail sales.
Same-store new and used vehicle gross profits grew 25.5 percent and 24.0 percent, respectively.
Ford Motor Co. reported a profit of $2.6 billion.
July appears to be an even better month for new-car sales, although used sales seem to be slipping.
CNW Marketing Research projects that used-car sales were down roughly 10 percent year-over-year in July for franchise dealers, while independent dealers saw a 9.4 percent increase.
For the year, used car sales continue to show improvement over 2009, up 2.6 percent to 21.77 million vs. 21.21 million a year ago.
Sometimes used sales decline at franchise stores when new sales rise because sales staffs sell both.
Another hurdle for franchise dealers is prices for late-model used vehicles have been bumping against new vehicle prices.
The higher prices are due to higher wholesale prices, which are driven by a shortage of vehicles at auction.
This should be a self-correcting problem, said Tom Kontos, vice president of analytical services for ADESA.
Higher used prices mean dealers can be more aggressive taking trades. Since 60 percent of all new-car sales involve trades, that means more new-car sales. Those trades, of course, increase supply to used market, easing prices.
"Nothing happens in the used-car market until a new car is sold," Kontos said.
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