AutoNation 2015 Annual Report Download - page 4

Table of Contents
The franchises in each segment also sell used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance
products. For the year ended December 31, 2015, Domestic revenue represented 34% of total revenue, Import revenue represented 34% of total revenue, and
Premium Luxury revenue represented 32% of total revenue. For additional financial information regarding our three reportable segments, please refer to Note
19 of the Notes to Consolidated Financial Statements set forth in Part II, Item 8 of this Form 10-K.
Except to the extent that differences among reportable segments are material to an understanding of our business taken as a whole, the description of our
business in this report is presented on a consolidated basis.
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We seek to create long-term value for our stockholders by being the best-run, most profitable automotive retailer in the United States. We believe that the
significant scale of our operations and the quality of our managerial talent allow us to achieve efficiencies in our key markets. To achieve and sustain
operational excellence, we are pursuing the following strategies:
 .
We seek to deliver a consistently superior customer experience by offering a large selection of inventory, customer-friendly, transparent sales and
service processes, and competitive pricing. We believe that this will benefit us by encouraging our customers to bring their vehicles to our stores for
all of their vehicle service, maintenance, and collision repair needs and also by driving repeat and referral vehicle sales business.
We have invested and will continue to invest in the AutoNation retail brand with the goals of enhancing our strong customer satisfaction and
expanding our market share. Our Domestic and Import stores are branded nationally under the AutoNation retail brand, which enables us to leverage
our advertising efforts and digital channels to market our stores, new and used vehicle inventory, and parts and service business.
We continue to make significant investments to build a seamless, end-to-end customer experience in our stores and through our digital channels,
and to improve our ability to generate business through those channels. As part of our strategic initiatives, we are implementing “AutoNation
Express,” which enables our customers to complete certain automotive retail- and service-related transactions through our digital channels and offers
a more fully integrated in-store and digital customer experience while also increasing traffic to our digital channels. We have developed features
such as selecting and reserving a vehicle with a guaranteed price, scheduling a test drive, calculating payments, receiving a firm purchase offer for a
vehicle that a customer wants to sell, applying for financing options, arranging service appointments, and receiving updates on maintenance and
repair services, most of which have been deployed to all of our markets as of December 31, 2015. Future capabilities are expected to include in-store
tools to further our customers’ on-line experience and the ability for a customer to pay for maintenance and repair services online.
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As the largest automotive retailer in the United States, we are uniquely positioned to leverage our significant scale so that we are able to achieve
competitive operating margins by centralizing and streamlining various business processes. We strive to manage our new and used vehicle
inventories so that our stores’ supply and mix of vehicles are in line with seasonal sales trends and also minimize our carrying costs. Additionally,
we are able to improve financial controls and lower servicing costs by maintaining many key store-level accounting and administrative activities in
our Shared Services Center located in Irving, Texas. Finally, we leverage our scale to reduce costs related to purchasing certain equipment, supplies,
and services through national vendor relationships.
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We have retail operations in 15 states with a focus on major metropolitan areas, and we seek to offer all of our core vehicle brands within all of our
key markets. We will continue to actively pursue acquisitions and new store opportunities that meet our return on investment threshold, with a focus
on enhancing brand representation within our existing geographic footprint as well as additional markets that can be supported by our existing
management infrastructure.
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