Some Asbury Automotive Group dealerships that normally had 500 vehicles in stock had just 60 on hand at the nadir of the last quarter, the result of the Japanese earthquake and tsunami in March that halted manufacturing for companies like Toyota and Honda.
The Duluth auto retailer said the worst was behind it, as supplies of Honda vehicles have increased 70 percent since August. Toyota, which saw its production ramp up earlier, had a 17 percent increase in vehicles since August. The quarter ended Sept. 30.
"It was the lowest amount of new-car inventory we've had in the [16-year] history of the company," executive vice president and chief operating officer Michael Kearney said. "The lack of availability kept people out of the marketplace."
Asbury's revenues from new car sales slipped for the quarter, down to $563.1 million from $563.9 million in the third quarter a year ago. Used vehicle revenues rose, though, to $326.7 million from $284.7 million. Kearney said Asbury began a program two years ago to increase the number of used cars the company sells; it is now selling .83 used cars for every new one, up from .62 when the program began.
High profit margins on vehicles and the increase in used car sales helped Asbury, the nation's sixth-largest retailer, make $12.3 million for the quarter. A year ago, it made $12.5 million in the same period.
Kearney said he expects sales of both new and used cars to pick up in the coming months.
Additionally, Asbury has been buying property in anticipation of some of its leases ending and now owns 60 percent of its 79 locations. The company has reduced its debt levels, senior vice president and chief financial officer Scott Krenz said, and has more access to capital.
"What we try to do is position the company to be able to react quickly," he said. "We try to respond to whatever gets thrown at us."
