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AutoNation (AN) Expands Foothold to Texas Market, Opens New Store

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AutoNation, Inc. (AN - Free Report) recently announced the opening of its store in Texas in San Antonio, being the first of the five additional stores which the company plans to open in the United States this year. Moreover, AutoNation USA San Antonio is the first AutoNation store in the Texas market.

The Fort Lauderdale-based company is excited about expanding its footprint to the Texas market and providing employment opportunities in the region. Through the new dealership, the company wants to provide an enhanced and peerless customer experience in San Antonio.

The AutoNation USA stores take advantage of the AutoNation brand, scale, and proven customer-focused processes to build a niche in the used vehicle market. The stores bring to table the "1Price Pre-Owned" model, which encompasses haggle-free pricing. AutoNation USA also offers the "We'll Buy Your Car" feature, enabling customers to sell their vehicles directly to AutoNation without having to purchase a vehicle.

AutoNation intends to build in excess of 130 stand-alone pre-owned AutoNation USA stores by the end of 2026. Also, the company has a target to achieve annual sales of 1 million combined new and pre-owned vehicles.

Incorporated in Delaware in 1991, AutoNation is the largest automotive retailer in the United States.  As of Mar 31, 2021, AutoNation owned and operated 315 locations coast-to-coast. AutoNation has sold more than 13 million vehicles, the first automotive retailer to reach this historic landmark.

AutoNation’s diversified product mix, strong foothold, large dealer network and aggressive store expansion efforts, along with brand extension strategy and alliances, are praiseworthy. Impending buyout of 11 stores and a collision center from Peacock Automotive Group is set to boost AutoNation’s portfolio and add $380 million in its annual revenues. Encouragingly, AutoNation expects second-quarter 2021 shipments from manufacturers to double from the year-ago period.

Enhanced digital solutions have aided AutoNation to further boost profitability and market presence. Initiatives like ship-to-home next day, curb-side pick-up option, and buy online, pick-up in stores options are picking up pace, driving additional traffic to the company’s online site. With the launch of its digital platform — AutoNation Express — which enables customers to buy and sell vehicles online providing them a truly comprehensive and personal experience, the company has stepped up its digitization game.

Moreover, AutoNation, which shares space with Penske Automotive (PAG - Free Report) , Asbury Automotive Group (ABG - Free Report) and Group 1 Automotive (GPI - Free Report) , put up an impressive show during the first quarter of 2021, with adjusted earnings of $2.79 per share, translating to an astonishing 207% jump year over year.
However, the global chip crunch, which is currently wreaking havoc on the auto industry, is a major tailwind for the auto retailer. In fact, AutoNation anticipates the demand for new vehicles to exceed supply as inventory levels remain constrained, which might induce lost revenues.

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