Dealerships with strong used focus land on top – from Automotive News April 24, 2023

Dealership groups on Automotive News’ annual ranking focused strongly on used-vehicle operations in 2022, seeking trade-ins and buying directly from consumers to pad used inventories and sustain sales.

Honing their used-vehicle operations proved critical again last year for franchised dealership groups contending with slightly improved but not fully recovered new-vehicle production.

Cavender Auto Family, of San Antonio, didn’t get nearly enough new cars to sell in 2022, CFO Jon Briggs said. But adding five franchised dealerships last May and December in Oklahoma — the first market for the group outside Texas — and putting more emphasis on buying inventory from customers helped Cavender retail more used vehicles, he said.

“Part of it is really simple — if we can’t sell apples, we’ll sell oranges,” Briggs told Automotive News.

Those efforts helped Cavender Auto Family leap 23 spots up Automotive News’ annual ranking of the top 100 dealership groups in used-vehicle sales based in the U.S. Cavender retailed 19,611 used vehicles last year, up 35 percent from 2021, to land at No. 38.

The top 100 groups sold a combined 3,115,933 used vehicles in 2022, up 0.5 percent from the comparable and adjusted figure of 3,099,800 for 2021, according to the Automotive News Research & Data Center, which compiles the list. That adjustment in part omits 2021 figures from the collective tally for large used-only retailers CarMax Inc., Carvana Co., Vroom Inc. and Shift Technologies Inc., which were not considered for the 2022 list. For the first time, Automotive News is breaking those into a separate ranking of used-vehicle-only retailers to be published in May.

Ultimately, 2022 bore similarities to 2021: As new-vehicle supply remained tenuous, used-vehicle operations continued to sustain dealership groups. As consolidation kept up at a robust pace, many groups that acquired franchised stores reported selling more vehicles, used and new alike. But the market as a whole differed.

“2022 was pretty much a continuation of 2021, except for volume,” Jonathan Banks, vice president of vehicle valuations at J.D. Power, said of the used-vehicle market. “Volume dropped compared to 2021.”

High retail prices for used vehicles persisted, and though per-vehicle profit on used cars declined a bit, it was still “pretty high,” Banks told Automotive News.
Still, there were some marked differences as market conditions evolved in 2022. Inflation and higher interest rates took root, causing a big shift in the consumers shopping for used cars and raising longer-lasting concerns about affordability, Banks said. Volatility in wholesale used-vehicle prices led dealers to reexamine how long to keep used vehicles on their lots before they depreciated, he added.

Related posts

DAV Campaign

We are proud to have raised $11,500 for this very important charity that helps...

10 reasons dealers buy from us.

Click Here
Home Services Contact