Group 1 Automotive, Inc. Q1 2010 Earnings Call Transcript
Turning to our largest manufacture partner, clearly Toyota’s recall issues dominated the automotive news during the first quarter. And we talked about this on our fourth quarter call but not sure how much of an impact these issues would have on our sales particularly the stop sale on models that represented about 60% of our Toyota volume. We found that the stop sale was short lived and following that period Toyota began to introduce aggressive financing incentive and pre-maintenance programs to restart their sales. This worked well in March and gave consumers a reason to come back to Toyota dealerships.
The Toyota brand remains a powerful one and the attractive offers generated substantial increase in customer traffic at our Toyota dealerships. As a result we’ve seen Toyota sales re-bounce strongly. For the quarter our Toyota sales increased 14% over the same period a year ago. And then the other operating highlights of the first quarter were improved used vehicle sales 24% on a year-over-year basis, increased gross profit in all business segments, expanded new vehicle and parts and service gross margins from the prior year period, better retail use vehicle margins on a sequential quarter basis, improved SG&A as a percentage of gross profit by 250 basis points (inaudible) car structuring increased gross profits.
Operating income increased 38% and earnings on an adjusted basis more than doubled. And regarding our brand mix during the first quarter, a percentage of our sales from Toyota sign on Lexus brands was down a bit from the fourth quarter accounting for 35% of our new vehicle units. Whereas Nissan Infiniti and Honda Acura increased their percent of the mix to 16% and 13% respectively. Grounding out our new vehicle unit sales for BMW and Mini with 10%, Ford at 9%, Mercedes-Benz accounted for 5% and GM and Chrysler accounted for 4 and 3% of unit sales respectively.
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