AutoNation Returns Positive Results During a Difficult Time

 

     Mike Jackson Chairman and CEO; and Mike Maroone Chief Operating Officer and President of AutoNation, appeared on Fox Business Television as well as Bloomberg Business Network and CNBC;  to provide guidance on the current state of the U. S. auto industry, and reflect on the positive past quarter revenue and earnings results for AutoNation.

 

     AutoNation out-performed the market with $2.7 billion in revenue and was solidly in the black for earnings. However, during each of their 40 years of experience, Mr. Jackson and Mr. Maroone stated that they had never seen a time like this in their professional lifetimes. It was a brutal quarter for the industry, and AutoNation had to work very hard on the cost side to make up for the lost volumes… stated Mike Maroone. This allowed the company to yield positive results during such a difficult time.

 

     Mr. Jackson explained …‘Combine the break of consumer confidence with an inventory increase of fuel efficient vehicles during the retreat of gasoline prices, and the industry faced extraordinary headwinds as auto showroom traffic was off 20 percent and business volume was off 40 percent due to the lack of available credit.’ Over-all retail sales industry wide was down almost 50 percent.

 

     Mr. Jackson went on to say, ' that if the U.S.  Federal Reserve can implement the purchase of credit securities in February of this year, this would help directly in freeing up the credit markets quickly, and we may see a normalization of credit begining in the month of March. Right now, it is difficult to place commercial paper with any institution, and the industry needs help in this regard.  We are looking to February, and have a lot of hopes that the Fed will be able to implement this program at this time.  

 

     As to the stimulus plan;  Mr. Maroone indicated that “every little bit helps", and 'though the "stimulus" plan would provide some positive results, it would only be a part of helping the economy. It is the “credit availability” that would be most  significant in helping the auto industry to recover to more normal functionality,' Mike Maroone explained.

 

     Fox Business specifically asked about some programs available in countries such as Germany and France which provide a $1500 to $2500 in tax credits per vehicle to individuals who turn in a used car for a new car? Mr. Jackson indicated … 'This is a quite interesting program" and  he felt that it helped these countries improve and modernize their fleets'…Mr. Jackson went on to saythat, currently the average age of U. S. automobile is about 9-10 years and that these older cars contribute disproportionately to air pollution and the lower average U. S. fleet mileage as well.  'The fleets in Europe are 30-40 percent more efficient in fuel milage as a result of these types of programs as well as the implementation of higher gas taxes on fuel.'

 

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                                                                                     Fox Business Network

 

                                                                                                      CNBC

 

                                                                                       Bloomberg Television