Welcome to the Daily 5 report for Thursday, Aug. 7.
Any way you cut it, big dealership groups — and probably small- and medium-size auto retailers — are raking in major gains in their service and parts units this year.
As Julie Walker reports today, all six U.S. public auto retailers saw increases in same-store service and parts revenue and same-store service and parts gross profit numbers for the second quarter — figures so good that many reported record fixed operations quarterly results.
Sonic Automotive Inc., Group 1 Automotive Inc. and AutoNation Inc. all reported double-digit percentage point increases for both metrics, and Lithia Motors Inc. reported such an increase in its same-store service and parts gross profit, Walker wrote.
Sign up for the Daily 5 report here.
The added revenue will no doubt help dealerships combat anticipated lower sales and higher import vehicle sticker prices stemming from U.S. tariffs.
To be sure, some of this bump stems from comparisons to last year when the CDK cyberattacks essentially shut down half of U.S. dealerships for more than two weeks. And analysts caution that recall and warranty work started growing during the second half of last year, so it might be tough for groups to sustain these gains compared with 2024's results.
Still, anyone who has seen these U.S. recall statistics would likely agree that service departments are going to be extra busy this year. And with average new-vehicle sticker prices approaching $50,000, some of us will be holding on to our current vehicles longer and spending more money in our dealership service departments.
On other topics, reporter Larry P. Vellequette has been following the emergence of autonomous trucking for several years and wrote this column making a compelling argument for helping ensure the safety of these robot trucks on our highways: Limit their usage to overnight hours.
"We would not only dramatically reduce their interactions with other motorists but also relieve traffic congestion during the daytime," Vellequette wrote.
Finally, the Center for Automotive Research named Elizabeth Krear as its new CEO. Krear comes to CAR from J.D. Power and previously was a key engineer at Stellantis. She was a member of the 2020 class of the Automotive News 100 Leading Women in the North American Auto Industry.
That's it for now. Have a great day. If you want to see this story in your browser, click here.
— Philip Nussel, online editor
No comments:
Post a Comment