AutoNation is coming off a record-setting quarter at the end of 2020. One of the nation’s largest automotive retailers made a strong rebound after the COVID-19 pandemic affected company operations across the U.S. Today on CBT News, Mike Jackson, CEO of AutoNation, joins the show to discuss AutoNation’s recent success, as well as other pressing issues facing the automotive industry.
Jackson begins the conversation by looking back on AutoNation’s strong performance in 2020 Q4. AutoNation posted all-time records during their 2020 Q4 earnings report. The stock of the company also reached an all-time high during the quarter. Jackson said the automobile represented freedom of mobility as many commuters transitioned to buying personal vehicles.
“The American people have reallocated where they’re spending,” said Jackson. “They’re spending money on their home because they’re spending so much time there. They want a bigger home that’s nicer. They’ve moved away from density, and they want more personal transportation.”
Jackson goes on to say that he expects this to continue even after the full distribution of the COVID-19 vaccine. The pandemic was scarring for many Americans, changing their outlook of personal space and personal transportation forever.
Jackson then goes into the lessons he learned during the pandemic. He says that the two main points he learned during 2020 were that dealers were extremely resilient and adaptable and dealers have proven the value of the franchise system. During the pandemic, dealerships were deemed essential to service and sell cars. Jackson says he admires how dealers stepped up to prove their value to their communities.
As inventories grew tighter, dealers benefited from high demand. Gross profits rose as transactions per vehicle increased to new highs. Despite what retailers might think, tighter inventories were also beneficial to the automakers as well. Jackson says that OEMs had fewer incentives and carrying costs were also lower. According to Jackson, dealers will have to wait and see if the manufacturers cut back or return to their old ways.
Jackson concludes the conversation by discussing the growth of the EV market. He says that regulatory mandates around the world are pushing global automakers towards electrification. OEMs are now tasked with the challenge of creating electric automobiles that consumers are genuinely interested in buying. Jackson says that AutoNation is excited about the arrival of EVs. The company will embrace and sell them to the best of its ability.
“The lessons learned so far are that you better have an exciting product that the consumer will embrace,” said Jackson. “And you better price it right or you will get your head handed to you.”
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