Tuesday, February 16, 2021
In-Your-Face Inflation: AutoNation Brags About Huge Jump in Per-Vehicle Gross Profit on Soaring Prices Despite Declining New-Vehicle Unit Sales | Wolf Street
AutoNation, the largest chain of franchised auto dealerships in the US, reported fourth quarter earnings this morning – and even as the total number of new vehicles sold in the quarter fell from a year earlier, the company bragged about a number of records, all of them related to higher prices and stupendous growth in high profit margins, a sign that consumers are willing to pay those higher prices and that they have kissed their hopes for good deals goodbye.
That broad acceptance by consumers of higher prices that allowed for record fat profit margins for the seller is a mega-sign that inflation in new and used vehicles retail is making breath-taking headway.
And yes, now is a terrible time to buy a new or used vehicle. Get ready to pay an arm and a leg, and then watch the dealer and the automaker laugh all the way to the bank.
Inflation is a great thing for the companies on the other side, charging the higher prices. They get to boost their revenues and profits without having to sell more items. It’s not so great for consumers who have to pay a lot more.
This is good to know as I've actually been thinking (actually just fantasizing) about buying say a 2003 or so C5 Z06 Corvette. YouTube says you can get one for under $20K! If you look for it! Or not! I didn't need one anyway. I can think about it, not do it, and still have the money. #MLC.