Group 1 Automotive Beats Wall Street Predictions Due to Higher Used-Car Sales
Although this is positive news for the auto sales giant company, new car manufacturers are still struggling.
The company, which is the third-largest auto retailer in the United States with dealerships also in the U.K. and Brazil, posted a 44 percent increase in quarterly profits last week.
New car sales in the United States have gone up 7.4 percent this quarter and inshore-used car sales have increased by 11 percent.
"Typically you make a little bit more margin on a used car than you do on a new car," said Group 1 Automotive CEO, Earl Hesterberg.
The CEO said that increased sales in used vehicles were due to internal measures placed to promote offerings of such units, which included adjusting the amount of commission salespeople could earn from selling used cars and focusing on lower-priced autos that would have previously been sent to auction.
The company reported a net income of $56.46 million, a $2.72 per share increase from $39.13 million, or $1.84 per share, last year.
But despite these rising numbers, the auto industry is struggling with automakers Ford, General Motors, and Fiat Chrysler who all predicted smaller earnings for 2018 due to rising prices for raw materials. Shares for all three companies fell afterwards.
Group 1 Automotive was down by almost 2 percent during last Thursday's intraday trading, according to CNBC.
President Trump announced on Wednesday and he and European Commission President Jean-Claude Junker had agreed to work towards "zero tariffs, zero non-tariffs barriers and zero subsidies for the non-auto industrial goods."
Hesterberg was relieved by the news.