AutoNation 2006 Annual Report Download - page 30
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Table of Contents
Parts and Service
Revenue $ 2,600.4 $2,508.5 $ 91.9 3.7 $2,366.9 $ 141.6 6.0
Gross profit $ 1,141.4 $ 1,100.0 $ 41.4 3.8 $1,036.7 $ 63.3 6.1
Gross profit as a percentage of
revenue 43.9% 43.9% 43.8%
Revenue $2,572.7 $2,508.5 $ 64.2 2.6
Gross profit $1,126.8 $ 1,099.9 $ 26.9 2.4
Gross profit as a percentage of
revenue 43.8% 43.8%
Parts and service revenue is primarily derived from vehicle repairs paid directly by the customers or via reimbursement from
manufacturers and others under warranty programs. Reported parts and service revenue and gross profit benefited from the impact of
acquisitions when compared to same store performance.
Same store parts and service revenue and gross profit increased during 2006 compared to 2005 due to increases in customer-paid
work for parts and service and wholesale parts, partially offset by a decrease in warranty business. Warranty declines were driven in part
by improved quality of vehicles manufactured in recent years, as well as changes to certain manufacturers’ warranty and prepaid service
programs. The improvements to customer-paid are attributable to our service drive process, maintenance menu and service marketing
program, as well as our pricing models and training programs. Additionally, during 2006 we experienced an increase in parts and service
revenues and gross profit related to volume imports and premium luxury vehicles, compared to flat revenues and a decrease in gross
margin related to parts and service for domestic vehicles.
Despite the business disruption in our Florida stores due to the effects of Hurricane Wilma, parts and service revenue for 2005
increased compared to 2004 due to increases in customer-paid and warranty work as well as our parts wholesale business. Parts and
service gross profit for 2005 increased compared to 2004 due to increases in customer-paid and warranty work. The improvements are
attributable in part to our service drive process, maintenance menus and service marketing program, as well as the continued optimization
of our pricing models and training programs.
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