Asbury Automotive Group has reduced its debt, is buying up the car dealerships it leases and has spent money to create common technology and systems company-wide.
A shortage of vehicles caused by the Japanese tsunami last year is finally abating and car manufacturers that held back on new releases during the recession are finally letting loose with updated vehicles and new models.
All of that puts Asbury in a good place, executives said. That's far from where they were when they moved from New York to Duluth in 2009 and received a letter from an auditor questioning whether they would be around in a year.
"It's a very different company," said Craig Monaghan, president and CEO of Asbury. "It was a difficult time for us."
Asbury, one of the largest automotive retailers in the country, has gone from survival mode to improvement mode, Monaghan said. Looking forward, he said, the company needs to improve customer experience and its own productivity.
Jamie Albertine, an automotive analyst at Stifel Nicolaus, said the company has challenges ahead, but it is in a strong position considering a complicated turnaround process.
"We believe they're well positioned to go on the offensive," he said.
Asbury made $67.9 million in 2011, a 78 percent increase over the $38.1 million it made in 2010. The company made $21.5 million in the fourth quarter, as compared to $5.4 million in the fourth quarter of 2010.
While people are still trading in old vehicles with very high mileage, executive vice president and chief operating officer Michael Kearney said more people are bringing in cars with fewer miles, indicating they're buying vehicles because they want to, not because they need to.
He said with lowered unemployment fears, people are more willing to upgrade and take advantage of improved fuel efficiency, better safety and new in-car technologies.
About the Author
