Two of the nation’s largest new-vehicle retailers report higher fixed operations results for the second quarter, including a promising increase in collision-repair work.
“I think miles-driven has gone up,” says AutoNation CEO Michael Manley (pictured, below left), during a conference call to report second-quarter earnings. “That, combined with the focus of the team, has helped us there. And I think that will continue for sure.”
AutoNation, based in Fort Lauderdale, FL, reports fixed operations revenue of $995.9 million in the second quarter, up 6.3% vs. a year ago. That’s on a same-store basis. Through the first half, AutoNation’s fixed ops revenue increased 10.6%, to about $2 billion.
“That’s clearly driven by customer-pay, which has done very well,” says Joe Lower, AutoNation chief financial officer.
Lithia Motors, based in Medford, OR, reports separately its fixed ops revenue in the second quarter was $546.3 million, up 9.4% vs. a year ago, also on a same-store basis. For the first half, Lithia reports fixed ops revenue was up 11.1%, to $994.4 million.
Both retail groups note a familiar pattern in fixed ops results as the industry recovers from the pandemic: higher customer-pay work as customers drive more and doing more work customers had postponed. Those revenue generators are partly offset by lower warranty work because new-vehicle volume is down due to short inventories.
AutoNation reports its new-unit sales were down 25% in the second quarter vs. year-ago, to 72,347. Lithia says its new-vehicle unit sales declined 8.5%, to 68,752.
Something relatively new is that collision-repair work, which had lagged, may rebound as customers drive more and get in more accidents, the companies say.
Estimated vehicle miles traveled on all U.S. roads and highways are about 288 billion miles (463.7 billion km) in May 2022, the latest month for which statistics are available from the Federal Highway Admin. That’s up 1.3% vs. a year ago. Year-to-date through May, miles were up about 3.8% from prior year.
