AutoNation 2006 Annual Report Download - page 27

Table of Contents
New Vehicle

 
 
 
       

Revenue $ 11,163.0 $ 11,224.0 $ (61.0) (.5) $ 11,258.0 $ (34.0) (.3)
Gross profit $ 817.2 $ 816.7 $ .5 .1 $ 809.3 $ 7.4 .9
Retail vehicle unit sales 369,567 381,082 (11,515) (3.0) 388,297 (7,215) (1.9)
Revenue per vehicle retailed $ 30,206 $ 29,453 $ 753 2.6 $ 28,993 $ 460 1.6
Gross profit per vehicle retailed $ 2,211 $ 2,143 $ 68 3.2 $ 2,084 $ 59 2.8
Gross profit as a percentage of revenue 7.3% 7.3% 7.2%
Days supply (industry standard of selling
days, including fleet) 52 days 55 days

Revenue $ 11,050.5 $ 11,224.0 $ (173.5) (1.5)
Gross profit $ 806.6 $ 816.7 $ (10.1) (1.2)
Retail vehicle unit sales 367,665 381,082 (13,417) (3.5)
Revenue per vehicle retailed $ 30,056 $ 29,453 $ 603 2.0
Gross profit per vehicle retailed $ 2,194 $ 2,143 $ 51 2.4
Gross profit as a percentage of revenue 7.3% 7.3%
The following table details net inventory carrying benefit (cost), consisting of floorplan interest expense net of floorplan assistance
earned (amounts received from manufacturers specifically to support store financing of inventory). Floorplan assistance is accounted for
as a component of new vehicle gross profit.

 
     
Floorplan assistance $111.6 $ 109.8 $ 1.8 $108.7 $ 1.1
Floorplan interest expense (142.0) (105.5) (36.5) (74.7) (30.8)
Net inventory carrying benefit (cost) $ (30.4) $ 4.3 $ (34.7) $ 34.0 $ (29.7)
Reported new vehicle performance for 2006 benefited from the impact of acquisitions when compared to same store performance.
Same store new vehicle revenue for 2006 decreased compared to 2005 primarily as a result of a decrease in same store unit volume,
particularly in our California and Florida businesses, which is consistent with industry trends in a challenging automotive retail
environment. In all our markets, we are seeing continued declines in our domestic new vehicle business, which we expect to continue in
2007. However, the level of retail sales for 2007 is very difficult to predict. In 2006, we saw a significant decline in non-luxury truck
sales, offset in part by stronger car sales, which we believe is consistent with industry trends. We believe these results reflect consumers’
reduced preference for trucks, due in large part to economic issues that included a significant decline in the California and Florida
housing markets, higher interest rates and higher gas prices during portions of 2006. In 2006, we saw a continued revenue shift in our
brand mix from domestic brands to volume import and premium luxury brands. In June 2005, General Motors announced an “employee
pricing for everyone” program, which was followed in July 2005 with similar programs introduced by Ford and Chrysler. These
programs, which concluded in October 2005, helped drive increases in sales volume during 2005 that were partially offset by a
challenging United States retail market and the effects of Hurricane Wilma on our Florida stores during the fourth quarter of 2005.
Same store gross profit per vehicle retailed increased as a result of the shift in our sales mix to more imports, including premium
luxury brands. Gross profit as a percentage of revenue remained constant in 2006 compared to 2005.
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