Group 1 Sees Used Sales Spike During Most Profitable Year Ever

Auto Remarketing | Group 1 Sees Used Sales Spike During Most Profitable Year Ever

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February 10, 2012 | HOUSTON By Staff Writer Joe Overby Earl Hesterberg, Group 1 Automotive

Though executives acknowledged on Thursday’s quarterly conference call that used-vehicle supply and pricing are likely to continue to be challenging, Group 1 Automotive celebrated a double-digit spike in fourth-quarter used sales on its way to achieving what was the most profitable year ever for the dealership group.

Group 1 capped its best-ever year with a 14-percent hike in retail used-vehicle gross profit in the fourth quarter, spurred by used retail revenue that was 16.8 percent higher at $362.9 million.

The company moved 17,775 used units during the period, up 12.7 percent year-over-year.

Additionally, total used-vehicle margins (including retail and wholesale) came in a 6.9 percent, a gain of 10 basis points. Senior vice president and chief financial officer John Rickel said during the call that  this margin gain is “reflecting a slight increase in the percent of used units acquired via trade-in.”

For the full year, used retail revenue climbed 11.2 percent at $1.4 billion, with used retail sales climbing 6.8 percent at 70,475 units.

All of this used retail strength occurred in a market where was supply was tough and appears to remain that way.

“It’s still hard to find good used cars. We’re getting more trade-ins as the new-vehicle market improves … but the age of some of these trade-ins, many of them aren’t really retail(-worthy) or they’re low-dollar units that don’t hit the fat part of our target market for used-vehicle retail,” Group 1 president and chief executive officer Earl Hesterberg said on Thursday’s call.

“So, I think the used-car pricing will probably stay firm this year and it’s still going to be a challenge to get enough high-quality used cars for retailers such as ourselves,” he added.

Sharing overall results, Group 1’s adjusted net income for full-year 2011 hit an all-time high of $86 million, a 38.3-percent hike from 2010. Yearly revenues came in at $6.1 billion, marking a 10.4-percent increase.

As for the fourth quarter, adjusted net income was a best-ever $22 million, up 49.3 percent year-over-year. Quarterly revenue was $1.6 billion, up 13.1 percent.

“I am proud of the record fourth-quarter and full-year results that Group 1 reported today, especially given the supply challenges we faced with most of our Japanese brand stores for the majority of the year and in a sales environment that was about 25 percent lower than our previous record year in 2006," stated Hesterberg

“The strong results reflect the strength of our operating team as well as the significant improvements we have made to our operating model during the past several years,” he continued. “These improvements should continue to deliver operating leverage as new-vehicle sales increase to a more normalized 15 million to 16 million unit selling environment in the next few years. Looking ahead, we anticipate new vehicle industry sales will increase by more than one million, to 14 million, units in 2012.”
 

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Cincinnati Independent Auction Moves into New Facility, Broadens Repo Sales

Auto Remarketing | Cincinnati Independent Auction Moves into New Facility, Broadens Repo Sales

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December 9, 2011 | CINCINNATI By Auto Remarketing Staff

A Cincinnati independent auction recently moved into expanded and updated facilities and revealed plans to ramp up its bimonthly repo sale.

OKI Auto Auction relocated to a 10-acre lot, once part of the former Jim Beam Distillery off Interstate 75 at 120 Citycentre Drive. OKI leased temporary space for more than a year at the Hamilton County Fairgrounds across the street, according to a report posted by Cincinnati.com.

The story indicated OKI spent more than $2 million on the site, which includes a three-lane auction building and paved parking for vehicles. Northside Bank & Trust and the U.S. Small Business Administration provided financing.

Started by company president Lee Schoenling in 2000, OKI is now jointly owned with retired dealer Tom Moser. It has grown from seven to 70 full- and part-time workers.

Along with bi-monthly dealer consignment, the new facility is helping OKI boost its repossessed unit offering, too.

Repo sales now will be held on the first and third Wednesdays of each month at 10 a.m., before dealer-only sales.

The Cincinnati.com report indicated OKI projects to have 15,000 units go down its lanes this year.

The original online story can be found here.

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Volkswagen Group Eyes Sales Objective of 8 Million Units

Auto Remarketing | Volkswagen Group Eyes Sales Objective of 8 Million Units

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December 19, 2011 | WOLFSBURG, Germany By Auto Remarketing Staff Volkswagen Jetta

Volkswagen Group believes its goal of moving 8 million units worldwide for the first time is within reach since through November, the German automaker sold 7.51 million units.

The figure marks a 13.9-percent rise from last year’s sales total. VW indicated it moved 6.59 million units from January to November of 2010.

The OEM is confident of making its sales objective since last month’s total represented a 15.3-percent rise from the same month last year. The group sold 711,400 in November, up from 617,200 a year earlier.

“We are making very good progress. Our target to top an annual 8 million units for the first time is within reach. That is an important milestone for the group,” VW Group board member for sales Christian Klingler said.

“Despite the anticipated high delivery levels for this year, we are already preparing for a very challenging year in 2012. Risks on European markets, in particular, are increasing,” Klingler acknowledged.

Looking at its sales performance geographically, VW Group noted that its brands delivered 3.38 million sales in Europe through November. That figure is 11 percent higher than then the 3.04 million units the OEM sold on the continent through 11 months of 2010.

The automaker specifically noted growth in Western Europe except Germany, which the company does not include in this particular metric. VW Group enjoyed a 6.6-percent gain in sales through November in this region, seeing volume rise from 1.71 million units to 1.82 million.

Within its home country of Germany, VW Group pointed out its sales gains are even stronger. The company moved 11.7 percent more units through November than the same span last year — 0.95 million units to 1.06 million units.

Higher still, VW said its deliveries in Central and Eastern Europe are up year-over-year as well. To be exact, sales are 29.3 percent higher — 382,800 units to 494,800 units.

In North America, VW Group saw its sales shoot up 21.4 percent from 494,700 units to 600,700 vehicles. Of these totals, the U.S. sales constituted 398,800 units, a 22.5-percent climb from the 325,600 vehicles the OEM moved from January through November of last year.

In South America, the OEM indicated a 6.6-percent year-over-year uptick from 802,600 vehicles to 855,500 units

And in the Asia/Pacific region, VW Group highlighted an 18.3-percent spike from 2.02 million units to 2.39 million units. Fueling that rise in the first 11 months was a 15.5-percent sales rise in China where VW Group indicated it delivered 2.11 million units, up from 1.82 million.

Also, the company pointed out its deliveries to India soared a whopping 125.4 percent from 44,600 units to 100,600 units.

Positive Trends for All Group Brands

After breaking down its sales performance regionally, VW Group outlined how each of its brands has fared through the first 11 months of the year.

Officials said Volkswagen Passenger Cars delivered 4.69 million vehicles to customers worldwide from January to November. That sum is 12.4 percent higher year-over-year from 4.18 million units.

VW Passenger Cars gained the most traction in Central and Eastern Europe (up 47.5 percent from 132,800 units to 195,800 vehicles) followed by North America (up 22.5 percent from 366,200 units to 448,500 vehicles) and the Asia/Pacific region (up 14.4 percent from 1.57 million units to 1.80 million vehicles).

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