AutoNation 2007 Annual Report Download - page 31

Table of Contents
New Vehicle

 
 
   
      


Revenue $ 10,195.6 $ 10,985.0 $ (789.4) (7.2) $ 10,995.8 $ (10.8) (0.1)
Gross profit $ 720.0 $ 805.2 $ (85.2) (10.6) $ 801.9 $ 3.3 0.4
Retail vehicle unit sales 328,963 362,895 (33,932) (9.4) 372,508 (9,613) (2.6)
Revenue per vehicle retailed $ 30,993 $ 30,270 $ 723 2.4 $ 29,518 $ 752 2.5
Gross profit per vehicle retailed $ 2,189 $ 2,219 $ (30) (1.4) $ 2,153 $ 66 3.1
Gross profit as a percentage of revenue 7.1% 7.3% 7.3%
Days supply (industry standard of selling days, including fleet) 53 days 51 days

 
 
   
       

Revenue $ 10,107.7 $10,985.0 $ (877.3) (8.0) $ 11,050.5 $11,224.0 $ (173.5) (1.5)
Gross profit $ 712.6 $ 805.2 $ (92.6) (11.5) $ 806.6 $ 816.7 $ (10.1) (1.2)
Retail vehicle unit sales 327,372 362,895 (35,523) (9.8) 367,665 381,082 (13,417) (3.5)
Revenue per vehicle retailed $ 30,875 $ 30,270 $ 605 2.0 $ 30,056 $ 29,453 $ 603 2.0
Gross profit per vehicle retailed $ 2,177 $ 2,219 $ (42) (1.9) $ 2,194 $ 2,143 $ 51 2.4
Gross profit as a percentage of revenue 7.1% 7.3% 7.3% 7.3%
Reported new vehicle performance during 2007 benefited from the impact of acquisitions when compared to same store performance.
Same store new vehicle revenue decreased $877.3 million or 8.0% during 2007, as compared to 2006, primarily as a result of a challenging
automotive retail environment, which resulted in decreased same store unit volume, particularly in California and Florida. We believe these
results were driven in part by continued weakness in the housing market. These volume decreases were partially offset by an increase in same
store average revenue per unit retailed, primarily as a result of the continued shift in our brand mix to premium luxury brands, as well as higher
average prices for domestic vehicles. To the extent that we continue to see weakness in the housing market, we anticipate that the automotive
retail market will remain challenging in 2008. We also expect the declines in our domestic brands to continue in 2008. Additionally, the potential
tightening in the automotive retail credit market may adversely impact our vehicle sales, while the reduction in interest rates is expected to have a
positive impact. As a result of these conditions, we believe that full year industry new vehicle sales will decline from the low-16 million unit
level in 2007 to the mid-15 million unit level in 2008. However, actual sales may materially differ.
Same store new vehicle revenue decreased $173.5 million or 1.5% during 2006, as compared to 2005, primarily as a result of a decrease in
same store unit volume, particularly in our California and Florida businesses, which was consistent with industry trends in a challenging
automotive retail environment. In 2006, we saw a significant decline in non-luxury truck sales, offset in part by stronger car sales. We believe
these results reflected 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
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