Automotive News - May 6, 2019 - Retail - 53

MAY 6, 2019 * 53
Customer incentives

Incentives in this table are a summary of retail
programs offered. Programs may vary by
region and model.
Cash
rebate

Finance
rate

FCA US
Expires June 3. In lieu of rebates, cut-rate financing
is available.
2019 models
Chrysler 300
$4,250-$6,000 0-3.9%
Pacifica (incl. Hybrid) $250-$2,000 0-3.9%
Dodge Grand Caravan
$500-$2,750 0-3.9%
Charger, Durango
$250-$2,500 0-4.9%
Challenger, Journey
$250-$2,250 0-4.9%
Jeep Cherokee
$500-$3,000 0-3.9%
Grand Cherokee
$500-$2,000 0-4.9%
Compass, Renegade
$500-$1,750 0-3.9%
Ram 1500, 1500 Classic $500-$4,000 0-5.9%
ProMaster Van*
$1,500
ProMaster City
$1,000 0-4.9%
2500, 3500
0-5.9%

FORD MOTOR CO.
Expires July 1. In lieu of rebates, cut-rate financing
is available.
2019 models
Lincoln MKC, MKT
$750-$2,250 0-6.9%
MKZ (incl. Hybrid)
$500-$1,500 0-6.9%
Continental, Nautilus
$250-$500 0-6.9%
Navigator, Navigator L
0.9-8.9%

New-vehicle margin turnaround
After 7 straight quarters of year-over-year declines in gross profit
per new vehicle, AutoNation's strategy to prioritize price over
volume turned the trajectory around in the first quarter.
GROSS PROFIT PER
NEW VEHICLE

YEAR-OVER-YEAR
CHANGE

Q1 2019

$1,919

9.8%

Q4 2018

$1,738

-5.9%

Q3 2018

$1,583

-5.8%

Q2 2018

$1,579

-8.7%

Q1 2018

$1,748

-8.2%

Q4 2017

$1,847

-5.6%

Q3 2017

$1,680

-6.2%

Q2 2017

$1,730

-9.0%

Q1 2017

$1,904

0.8%

THE FUTURE OF
AUTOMOTIVE
SEM HAS
/AI/RRIVED.

Source: AutoNation

GENERAL MOTORS
Expires May 31. In lieu of rebates, cut-rate financing
is available.
2019 models
Buick LaCrosse
$500-$5,000 0-3.0%
Enclave, Encore
$1,000-$2,000 0-3.0%
Envision
$500-$1,500 0-3.0%
Cascada, Regal Sportback,
Regal TourX
0-3.0%
Cadillac Escalade,
Escalade ESV
$5,000 0-2.0%
CTS, CTS-V
$1,250-$2,750
CT6
$1,250-$1,500
XT4, XT5, XTS
$500-$1,000 0-3.9%
Chevrolet Express Van*
$3,500
Silverado 1500
$1,000-$3,500 0-3.0%
Bolt EV
$1,000-$3,000
1.1%
Volt
$1,000-$3,000
Trax
$750-$2,250
12.9%
Blazer
$2,000
Cruze, Malibu
$750-$2,000
9.9%
Silverado 1500 LD
$750-$2,000
12.9%
Malibu Hybrid
$750-$2,000
Suburban, Tahoe
$1,500
Silverado 2500HD,
Silverado 3500HD
$1,000-$1,500
Colorado, Equinox
$1,000 9.9-1.1%
Camaro, Sonic, Spark $500-$1,000
Impala, Traverse
$500-$750
GMC Sierra 1500
$1,000-$4,000 0-3.0%
Savana Van*
$3,500
Sierra 1500 Limited $2,500-$2,700 0-3.0%
Canyon
$1,000-$2,000 0-3.0%
Sierra 2500HD
$500-$2,000 0-3.0%
Yukon, Yukon XL
$500-$1,500
Sierra 3500HD
$500-$1,000 0-3.0%
Acadia, Terrain
0-3.0%

AMERICAN HONDA
Expires July 8.

2019 models
Honda CR-V. Pilot, Ridgeline
Accord, Civic, Fit, HR-V, Odyssey

0.9-6.9%
2.9-6.9%

HYUNDAI-KIA
Genesis & Hyundai expire June 3. Kia expires July 1.
In lieu of rebates, cut-rate financing is available.
2020 models
Kia Soul
$500 0.9-9.5%
Telluride
0.9-9.5%
2019 models
Genesis G70, G80, G90
$1,000 1.9-7.9%
Hyundai Santa Fe XL
$500-$3,000 0-9.9%
Santa Fe, Sonata
$500-$2,500 0-8.9%
Elantra, Tucson
$250-$2,250 0-8.9%
Veloster
$1,000-$1,750 1.1-9.9%
Sonata Hybrid,
Sonata Plug-In Hybrid $500-$1,500 1.9-7.9%
Ioniq Hybrid, Kona
$500-$1,250 0-8.9%
Accent, Elantra GT
$500-$1,000 0-8.9%
Nexo
1.9-7.9%
Ioniq EV,
Ioniq Plug-In Hybrid
1.9-8.9%
Kona EV
2.9-8.9%
Kia Optima, Sorento
$3,000 0-7.5%
Sedona, Sportage
$500-$3,000 0-7.5%
Optima Hybrid,
Optima Plug-In Hybrid
$2,000 0-7.5%
Cadenza, Soul
$2,000 0-9.5%
Forte, Niro, Rio
$750-$1,000 0-9.5%
K900, Stinger
0-9.5%
Niro EV, Niro Plug-In Hybrid
0.9-9.5%

MAZDA
Expires June 3. In lieu of rebates, cut-rate financing
is available.
2019 models
Mazda CX-5, CX-9
$500-$1,500 0.9-9.4%
CX-3, Mazda6
$250-$750 0.9-9.4%
MX-5 Miata, MX-5 Miata RF
1.9-8.4%
Mazda3
2.9-9.4%

TOYOTA MOTOR NORTH AMERICA
Expires June 3. In lieu of rebates, cut-rate financing
is available.
2020 models
Toyota Sienna
$750-$1,250
Prius Prime
$750
2019 models
Lexus GS, F, LC*, RC F
$5,000 1.9-3.9%
GS*, IS*, LS* LX* $2,500-$4,000
0-3.9%
ES*, GX*, RX*
$500-$2,000 1.9-3.9%
NX*, RC*, UX*
$750-$1,750 1.9-3.9%
UX 250h
1.9-3.9%
Toyota Avalon (incl. Hybrid)
$3,000 1.9-7.9%
Prius Prime, Sienna
$750-$3,000
0-7.9%
Highlander, Tundra $1,750-$2,500
0-9.9%
Corolla
$1,000-$2,500 0-9.63%
86, C-HR, Sequoia
$750-$2,000
0-8.9%
Corolla Hatchback
$1,000-$1,500 1.9-9.42%
Camry (incl. Hybrid)
$750-$1,500
0-8.9%
Highlander Hybrid
$750-$1,500 1.9-8.9%
Prius, Tacoma, Yaris Sedan $500-$1,000 1.9-8.9%
*Applies to select models only

Rates & Incentives

STRATEGY

Volume takes big
dip at AutoNation
continued from Page 4

than the industry average, and at
least one analyst said the volume sacrifice could have a long-term cost.
"We're going to continually balance price and volume throughout
this process," Liebert said during a
call with analysts last month. "As we
think about how we serve our customers and manage that price-volume equation, it's ensuring that we
have the right vehicles on our lots to
serve our customers. And we're not
relying on discounting, and we're
not relying on in-the-quarter plays
from the [automakers] in order to
deliver that. That gives us the flexibility to serve those customers."
Gross profit per new vehicle, for all
of AutoNation's stores, rose 9.8 percent in the first quarter to $1,919. The
last time consolidated gross profit per
new vehicle rose was in the first quarter of 2017, when it inched up 0.8 percent. Gross profit per used vehicle retailed rose 4.6 percent to $1,378 in the
most recent quarter.
But even as per-vehicle profit rose,
AutoNation sold 13.2 percent fewer
vehicles on a same-store basis. That
compared with a 3.2 percent dip in
new light-vehicle sales industrywide,
according to the Automotive News
Data Center. And the company's total
gross profit on new vehicles fell 6 percent to $121.9 million, driven by the
decline in vehicle sales.
Liebert, who in March took over as
CEO from Mike Jackson, told Automotive News that turning around
the margin trajectory is important.
"We believe that this is the right
play for us right now," Liebert said.
"It showed up in our financials. So
the good news is, it's very simple,
but it requires execution at the store
level to do it. And our field team really, really responded throughout
the quarter in executing that."

F&I, inventory
AutoNation also prioritized finance-and-insurance profit, which
was already a strength for the group.
F&I gross profit per vehicle rose 7.4
percent to $1,897. Branded F&I

products were the first tenet in AutoNation's brand extension initiative,
which also includes standalone AutoNation USA used-vehicle stores,
collision centers and branded parts
and accessories.
Liebert said keeping an eye on inventory levels was also a component in the strategy.
AutoNation's new-vehicle days'
supply at the end of March rose to
77, compared with 69 a year earlier.
The average new-vehicle days' supply industrywide was 78 vehicles in
March, compared with 74 a year
earlier, according to the Automotive
News Data Center.
AutoNation aimed to have the right
mix rather than vehicles "that we have
to play a lot of games at the end of the
month or the end of the quarter to
move," Liebert said.
Jefferies analyst Bret Jordan expects AutoNation to focus on reducing inventory in the near term. That
could slightly drag down gross profit
per new vehicle in the second quarter, Jordan wrote in an investor note.
"Once inventory levels are normalized, we expect focus reverts to
maximizing new vehicle profitability with less emphasis on market
share trends," he wrote.

Skepticism
Analyst Rick Nelson, managing director at Stephens Inc., questioned the
long-term merit of AutoNation's plan.
"New-vehicle units are effectively
commodity products with transparent online pricing," Nelson wrote in
an investor note.
And stringent pricing standards
that lead to disparities among competitors could dampen customer
loyalty, Nelson added.
AutoNation's branding efforts in
F&I and parts and service also have
led to higher profit and wider margins, which makes volume a competitive advantage, he wrote.
"While [AutoNation's] new strategy to favor margins over units could
be a test it may result in short-term
volatility if dealerships feel the need
to drive volume at certain points in
the quarter, ultimately creating an
inconsistent experience for customers," Nelson wrote. a
Amy Wilson contributed to this
report.

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Automotive News - May 6, 2019 - Retail

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