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Tuesday, October 30, 2007

The Auto Retail Informer: October 30, 2007

Auto Retail Informer Intro October 30, 2007

I think it is pretty undeniable that there is something happening in the external environment, putting serious pressure on dealer earnings.  Asbury, Sonic, and Group 1 all reported "sluggish" results. 

I will continue to argue that the weakness is actually a reflection of the automakers being able to cut production (versus move metal.)  But whatever the reason, it continues to reinforce my view that the "shakeout" in the auto retail industry may be happening sooner than expected. 

Once again, I think we should be less focused on the external environment.  And more focused on who is doing more with less.  In that regard, I think Sonic had a remarkably impressive quarter.

Highlights:

• Comparable dealer metrics ...

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  Comparable dealer metrics (October 30, 2007)

  I will try to provide the key metrics (I usually provide after every quarter) tomorrow.  But in the mean time, below are the comparable store productivity metrics for Asbury, Group 1 and Sonic (that you can compare versus the store productivity metrics I provided yesterday on AutoNation, Lithia, and Penske.) 

  Also, keep in mind Group 1 had about $1.2 million ($12,098 per store) in charges associated with debt redemption and asset impairment in the third quarter of 2007.  And Asbury's net income per store benefited from tax benefits in the quarter (tax rate of 32.3% this quarter vs 37.5% last year.)

  As I mentioned, I think Sonic really shined this quarter.  Asbury stumbled.  But I think the heavy truck market really hurt them this quarter.  And A ...

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