Automotive News Used Car Report

The top 10 used-vehicle sellers accounted for more than half of the total used vehicles sold in 2001 by the top 100 dealership groups.

According to Automotive News' annual ranking of the top 100 dealership groups, the retailers sold 1,593,578 used vehicles in 2001, a 17 percent increase over 2000 sales of 1,361,678. The top 10 used-vehicle sellers sold 880,297 used units in 2001, a 28.5 percent increase over 2000.

Though franchised dealer groups focus on new vehicles, used vehicles are an important part of operations.

As important as new

"Used cars are a crucial part of our business - every bit as important as new cars," said Phil Hartz, spokesman for UnitedAuto Group Inc. of Detroit. UnitedAuto, the second-largest dealership group in new retail units, is the fifth-largest seller of used vehicles. It sold 69,302 used vehicles in 2001, a 19 percent increase over 2000.

"Our customers expect that we'll have used cars, and used cars represent a good profit opportunity not only in sales but in service and parts," Hartz said. "And used-car customers usually become new-car customers."

Ben Hollingsworth, chairman of Group 1 Automotive Inc. of Houston, agrees, saying his company's gross profit margin on used vehicles is higher than on new vehicles: "Our new-vehicle margin was 7.4 percent; our used-vehicle margin was 8.8 percent."

Group 1 sold 67,927 used vehicles in 2001, a 14.9 percent increase over 2000. It ranked No. 6 on the 2001 list.

AutoNation Inc., which is the biggest seller of new vehicles, tops the used-vehicle sales tally as well.

AutoNation, of Fort Lauderdale, Fla., sold 258,000 used cars and trucks in 2001, outselling its nearest competitor and former used-vehicle archrival, CarMax Inc., by more than 106,000 units. CarMax, of Glen Allen, Va., sold an estimated 151,185 used vehicles.

At Sonic Automotive Inc., the third-largest used-vehicle seller last year, President Scott Smith said used vehicles are an important part of the company, making up 36.2 percent of its sales volume in 2001.

Sonic, which is in Charlotte, N.C., sold 81,122 used vehicles, up 1.7 percent from 2000.

Asbury Automotive Group, which went public March 14, was the only top 10 company to have a drop in used-vehicle sales last year. Asbury, of Stamford, Conn., sold 65,000 used units in 2001, down from 70,000 in 2000. Asbury ranked No. 7.

First-quarter softness

Though used-vehicle sales were robust last year, some companies are not seeing the same brisk results this year.

Sonic's first-quarter used-vehicle sales were down 11 percent from the year-ago period. Group 1's first quarter used-vehicle sales dipped 2 percent.

Smith said Sonic's decline was mostly because of Ford Motor Credit Co. getting out of subprime lending and to the company's strong internal focus on new-vehicle sales.

Smith said the company has found other lending partners to fill the void left by Ford Credit. He also said Sonic is going to help its better-performing dealerships sell more used and new vehicles by subsidizing their advertising budgets.

Hollingsworth said he thinks the 0 percent financing deals offered by many manufacturers in the fourth quarter of 2001 put many would-be used-vehicle buyers into new vehicles and pulled those sales forward.

Despite a bumpy start, both Smith and Hollingsworth predict 2002 will be a good year.

Said Smith: "I think the market is going to be good this year for new and used vehicles, and I see some growth for certified sale."