AutoNation Says U.S. Auto Sales Can Grow; New-Car Retailer Sees Low-Interest Rates and Stable Gasoline Prices Continuing to Fuel Demand
AutoNation Inc. Chief Executive Mike Jackson said on Thursday there is "more potential on the upside" for U.S. vehicle demand as short term interest rates and gasoline prices remain stable even as intensified competition among car makers is putting pressure on new car profit margins.</br></br>AutoNation reported second quarter net from continuing operations rose 11% from a year earlier to a record 73 cents a share, in line with most analysts' expectations. Revenue for the just-ended quarter rose 13% to $4.4 billion. New vehicle sales rose by 7% on a same store basis, the company said.</br></br>Mr. Jackson said in an interview he expects U.S. light vehicle sales will finish 2013 in the "mid-15 million" range, and added there is "more potential on the upside" of that forecast.</br></br>While new vehicle demand should remain strong, Mr. Jackson said competition, particularly in the high-volume midsize car segment, is putting pressure on dealer profit margins.</br></br>"New vehicle margins are under pressure," Mr. Jackson said. "It's with the Japanese products. It's the mainstream, midsize sedans--Camry, Accord and Altima." Those high volume models from Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. are facing tougher challenges by new models from Detroit rivals Ford Motor Co., General Motors Co. and Chrysler Group LLC, and Korean brands Hyundai Motor Co. and Kia Motors Corp.