AutoNation 2000 Annual Report Download - page 6

projects that we expect to provide a reasonable return on our
investment.
(arrow) STRATEGIC DEALERSHIP ACQUISITIONS: We believe that we will
have additional opportunities to acquire dealerships in our key
markets. The factors that will impact whether we make additional
strategic dealership acquisitions include the brand, location and price
of available dealerships and whether such dealerships complement and
can be integrated into our existing operations.
(arrow) SHARE REPURCHASES: During 2000, we repurchased 27.6 million
shares of our common stock for an aggregate price of $188.9 million. As
of March 26, 2001, we are authorized to repurchase up to an additional
$179.2 million of our common stock pursuant to our latest
Board-authorized share repurchase program. The decision to make
additional purchases of our stock will be based on such factors as the
market price of our common stock, the potential impact on our capital
structure and the expected return on competing uses of our capital such
as strategic dealership acquisitions and capital investments in our
current businesses.
Grow Our E-Commerce Business
Due to the scale of our operations and our e-commerce infrastructure, we
believe that we are uniquely positioned to compete in the automotive retail
e-commerce marketplace. During 2000, we developed relationships with certain
Internet service providers and websites, as well as other parties, to purchase
leads or referrals of customers who are shopping for a vehicle. Using
"Compass," our proprietary web-based lead-management software tool, we provide
these customer leads to our dealerships for fulfillment to the extent possible.
Specially-trained Internet Sales Guides at our dealerships then use the
Internet-based Compass system to respond to customer inquiries 24 hours a day,
seven days a week. During 2000, our average customer response time was
approximately 1.2 hours, which is well below reported industry average response
times.
During 2000, we also entered into lead referral agreements with over 1,600
franchises operating from more than 1,000 independent dealerships. Under these
agreements, we sell customer leads that we cannot fulfill within our dealership
network. We plan to continue to enter into lead referral agreements with
dealers that are able to provide fulfillment capability for vehicle makes and
geographic areas that our dealerships do not cover. As we enter into additional
lead referral agreements, we intend to continue
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to set service and other standards that these independent dealerships must meet
to participate in our lead referral program.
OPERATIONS
As of December 31, 2000, we owned and operated approximately 400
automotive franchises from dealership locations in 18 states. We own and
operate franchises granted by the manufacturers of 35 different makes of
vehicles. The core brands of vehicles that we sell are Ford (Ford, Lincoln and
Mercury), General Motors (Chevrolet, Pontiac, GMC and Buick), Chrysler
(Chrysler, Jeep and Dodge), Nissan, Toyota and Honda. Our management structure
is focused on our local markets, where day-to-day decision-makers can be more
responsive to the needs of local customers. We have established ten districts
to manage our automotive retail business. The number of dealerships within each
district varies from district to district.
Each of our automotive franchises offers new and used vehicles for sale.
Each of our dealerships also offers financing for vehicle purchases, extended
service contracts and other finance and insurance products, as well as other
aftermarket products such as vehicle accessories, upgraded sound systems and