AutoNation 2005 Annual Report Download - page 7

Table of Contents
sales and service marketing programs. We expect our customer database and other tools to continue to empower us to implement our
customer relationship strategy more effectively and improve our productivity.
• Training Employees: One of our key initiatives to improve our productivity is our customized comprehensive training program for key
store employees. We believe that having well-trained personnel is an essential requirement for implementing standardized operating
practices and policies across all of our stores. Our training program educates our key store employees about their respective job roles
and responsibilities and our standardized common processes in all of our areas of operation, including sales, finance and insurance
and fixed operations. Our training program also emphasizes the importance of conducting our operations, including our finance and
insurance sales operations, in accordance with applicable laws and regulations and our policies and ethical standards. As part of our
training program, we conduct specialized training for certain of our store employees in areas such as finance and insurance, fixed
operations and sales. We also require all of our employees, from our senior management to our technicians, to participate in our
Business Ethics Program, which includes web-based interactive training programs, live training workshops, written manuals and
videos on specific topics. We also are launching the AutoNation General Manager University in 2006 to prepare our future general
manager prospects to become well-rounded successful leaders of our stores. We expect our comprehensive training program to
improve our productivity by ensuring that all of our employees consistently execute our business strategy and manage our daily
operations in accordance with our common processes and policies, applicable laws and regulations and our high standards of business
ethics.
Build Powerful Local-Market Brands
In many of our key markets where we have significant market share, we are marketing our stores under a local retail brand. We continue
to position these local retail brands to communicate to customers the key features that we believe differentiate our stores in our branded
markets from our competitors, such as the large inventory available for customers, our extended evening and weekend service hours and
the competitive pricing we offer for widely available services. We believe that by having our stores within each local market speak with one
voice to the automobile-buying public, we can achieve marketing and advertising cost savings and efficiencies that generally are not available
to many of our local competitors. We also believe that we can create strong retail brand awareness in our markets.
We have fifteen local brands in our key markets, including “Maroone” in South Florida; “John Elway” in Denver, Colorado; “AutoWay” in
Tampa, Florida; “Bankston” in Dallas, Texas; “Courtesy” in Orlando, Florida; “Desert” in Las Vegas, Nevada; “Team” in Atlanta, Georgia;
“Mike Shad” in Jacksonville, Florida; “Dobbs” in Memphis, Tennessee; “Fox” in Baltimore, Maryland; “Mullinax” in Cleveland, Ohio;
“Appleway” in Spokane, Washington; “Champion” in South Texas; “Power” in Southern California and Arizona; and “AutoWest” in Northern
California. The stores we operate under local retail brands as of December 31, 2005 accounted for approximately 69% of our total revenue
during fiscal 2005.
Operations
Each of our stores acquires new vehicles for retail sale either directly from the applicable automotive manufacturer or distributor or
through dealer trades with other stores of the same franchise. Accordingly, we depend in large part on the automotive manufacturers and
distributors to provide us with high-quality vehicles that consumers desire and to supply us with such vehicles at suitable quantities and
prices and at the right times. Our operations, particularly our sales of new vehicles, are impacted by the sales incentive programs conducted
by the automotive manufacturers to spur consumer demand for their vehicles. These sales incentive programs are often not announced in
advance and therefore can be difficult to plan for when ordering inventory. We generally acquire used vehicles from customer trade-ins, at the
termination of leases and, to a lesser extent, auctions and other sources. We generally recondition used vehicles acquired for retail sale at our
stores’ service facilities and capitalize costs related thereto as used vehicle inventory. Used vehicles that we do not sell at our stores generally
are sold at wholesale through auctions.
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