RICHMOND, Va. (AP) â¿¿ AutoNation Inc., the nation's largest car and truck retailer, is expected to report higher profit and revenue when it releases its second-quarter results before the stock markets open Thursday.
WHAT TO WATCH FOR: Whether the Fort Lauderdale, Fla.-based company can build on six quarters of profit and revenue growth as the auto industry continues to rebound.
From mini cars to monster pickups, total industry sales of new cars and trucks surged 22 percent in June to nearly 1.3 million vehicles. The annual sales pace rose to 14.1 million vehicles, according to Autodata Corp. If sales stay at that level for all of 2012, it will be the industry's best year since 2007.Falling gas prices, cheaper loans and new models drew buyers, despite the nation's high unemployment rate and uncertain jobs picture. An improving housing market lifted sales of pickups. And demand got a boost from owners who finally decided to replace the cars they held on to since the middle of the last decade. AutoNation said its retail new-vehicle sales increased 31 percent in the second quarter, with imported vehicle sales up 47 percent. Sales of domestic and luxury brands rose 18 percent compared with the year-ago period. Based on "continued momentum" in U.S. auto sales, AutoNation CEO Mike Jackson said last quarter that the company expected annual industry new vehicle sales in the mid-14 million units range. He cited improving credit availability and better inventories from Japanese automakers who struggled last year after the March earthquake and tsunami shut down production and cut off supplies of key parts. While the outlook is still below the 17 million vehicles sold in the booming mid-2000s, it's well above the industry's recent low point in 2009, when only 10.6 million vehicles were sold. WHY IT MATTERS: Results for AutoNation, which owns about 260 new-vehicle franchises in 15 states, are watched by car makers to help gauge the industry's recovery. Improved sales would suggest more loans are available and consumers are spending more, critical elements for the industry's emergence from the worst downturn since the Great Depression.