(Reuters) – AutoNation Inc said it expects strong demand for new vehicles to continue into next year, as low-interest rates and consumer preference for personal transportation during the pandemic helped drive a three-fold jump in its quarterly profit.
The top U.S. auto retailer on Monday reported adjusted net income from continuing operations of $384.9 million, or $4.83 share, for the second quarter ended June 30, compared with $123.9 million, or $1.41 per share, a year earlier.
“Consumers are buying vehicles before they even arrive at our stores. We expect the current environment of demand exceeding supply to continue into 2022,” Chief Executive Officer Mike Jackson said.
The global semiconductor chip shortage has depleted vehicle inventories and forced automakers to cut production, prompting consumers to pay more for cars as the COVID-19 pandemic drives demand for private vehicles.
Fort Lauderdale, Florida-based AutoNation’s gross profit per new vehicle jumped 89% to $4,157 in the second quarter, while the gross profit per used vehicle rose 24% to $2,240.
Sales of new and used vehicles jumped 42% and 37%, respectively, helped in part by lower borrowing costs.
Revenue rose 54% to $6.98 billion.
(Reporting by Shreyasee Raj in Bengaluru and Joe White in Detroit; Editing by Aditya Soni)
