AutoNation Chairman & CEO Mike Jackson, Chief Financial Officer, Mike Short, Vice President of Shared Service Center, Maura Berney, and Senior Vice President, Public Policy & Communications, Marc Cannon, joined with our 275 members of the AutoNation Team to celebrate the success of processing over 13,000 Cash for Clunker vehicles with a total rebate due AutoNation of $54 million by the U.S. government
The recent work of the Shared Service Center (SSC) during Cash for Clunkers was a validation of AutoNation’s move to a common back office support group.....
Congratulations for a job well done ... AutoNation TEAM !
Mike Jackson Chairman and CEO of AutoNation the largest auto dealership in the United States spoke this morning on CNBC to give a better sense to the business community as to where the car industry is headed after the successful "Cash for Clunkers" program.
Now that it is ended Mr. Jackson indicated that the auto industry sold a total of about 700,000 "Clunker" vehicles in a four week period where the volume would normally have been 75,000 units sold. "Cash for Clunkers could be considered the most successful stimulus program of all time. Mr. Jackson goes on to say.... 'If you strip away the clunker deals in august, the sales rate is tracking at an annual rate 10.5 million upward trend line going into this month of September and inventories are now at an extremely tight level of about 2 million units within the country accross all dealers.
Mike Jackson also addressed the forward inventory build that is now necessary as a result of the success of the program and goes on to say that ... 'AutoNation has increased "forward" orders by 50%; this represents about 20,000 vehicle units. This increase in orders will continue in future months, and for the industry as a whole, this will probably represent about 500,000 – 1,000,000 units per month of vehicle orders to the manufacturers. So the domestic factories really will have a real shot in the arm as to increased production '
Becky Quick of CNBC asked Mr. Jackson specifically if the "Cash for Clunkers program has pulled forward sales from the future," and in his response Mike Jackson indicated that after reviewing the typical Cash for Clinker customer, he is convinced that the program in reality "Clawed Back" sales from a customer who would not normally have bought a vehicle had it not be for this specifically tailored program. These consumers really were non-buyers; typically very conservative, with no credit issues, and understood from the very beginning that this program also had the propose to the lift in the U.S fleet fuel efficiency.
Mr. Jackson goes on to say that 'now on the other hand the current problem we are facing now is that dealers across the nation are waiting to be reimbursed by the government for the rebates that were advanced to the customer. The car industry and particularly the auto dealers have provided three billion dollars to the program upon the promise that they will be repaid within 10 days and are now becoming a little nervous that this money will be reimbursed in a timely manner. Hopefully within the next 30-60 days the rebate money will be forthcoming. There is no question that U.S auto dealers will get the money owed to them by Department of Transportation. However, the government is fastidious in its operation and accounting operations of the program as inspectors are in the showrooms at this moment auditing the program paperwork of the dealers. AutoNation itself took careful strategic measures for the administration of its "Cash for Clunkers program paperwork, knows its paperwork is perfect, is owed 55 million dollars at the moment. We could use this money."' Mr. Jackson concludes.
Mr. Jackson addressed the future of car sales for the U.S. ....in response to a question from Steve Liesman - CNBC economist.
' As a baseline during the first quarter of 2009 the industry was selling at about a 9.2 million unit annual rate of sales. During the second quarter of 2009 we were selling just under 10 million units. If you strip out the Cash for Clunker’s Program to find the normal selling rate we see a 10 to 11 million unit selling rate nationally. Next year in 2010 I see a 11-12 million unit rate of car sales and production and then during the "out years" in 2011 and beyond, we should see a gradual recovery to a production and distribution annual rate of 15 to 16 million units.
Mr. Jackson also concludes that 'there will be price firming on future units sold as the industry cannot provide the incentives previously maintained to help boost sales, and because of the costs which will be incurred by the manufacturers to increase the required fuel efficiencies for the U.S. fleet.
So there is hope of a continued recovery of the U.S. auto industry and AutoNation is excedingly proud to be part of it...!
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