AutoNation CEO: 'Better mood at funerals'
AutoNation Mike Jackson's never been one to mince words. How many top executive in the auto dealership world actually called for higher gas taxes to motivate automakers to make more fuel efficient vehicles more quickly?
So when Jackson, who runs the nation's largest public car dealership group, on Sunday said AutoNation scaled back its orders for new vehicles from automakers by 60 percent this month due to weak demand and increased inventories of unsold vehicles, people listen.
"Inventory is high for everyone," Jackson told Reuters in an interview at the Detroit Auto Show, which opened for a preview on Sunday. "Orders have been scaled back dramatically .... have been scaled back 60 percent for January." He said the plunge in U.S. sales has caused cars and trucks to pile up on dealer lots and he does not expect any improvement in demand during the first quarter.
'You may see some signs of life by end of March,' he said, calling the U.S. auto industry at "depression level sales" at the current annual sales rate of about 10-million units.
The poor sales environment was affecting the mood at the Detroit auto show, Jackson said. "I have seen a better mood at funerals,' he told Reuters TV. Still. Jackson said orders for trucks are up as gas prices decline from their 2008 highs.
Fort Lauderdale-based AutoNation owns and operates 321 vehicle franchises in 15 states with a range of U.S., Asian and European automobile brands. The company operates under the AutoWay brand in the Tampa Bay area. Shares of AutoNation, which fell below $4 last fall, have rebounded and are trading on Monday between $9 and $10 a share.
In November, Autoway Chevrolet of Tampa Bay, at 1700 Hillsborough Ave. E in Tampa, closed its showroom. AutoNation said the decision came from General Motors and reflected slower sales. The parts and collision center will stay open at the Hillsborough Avenue location. The closing reduces AutoNation's presence in the Tampa Bay area from 14 to 13 stores. The company said it has no other plans to close stores in the area.
Jackson told Reuters he expects a gradual improvement in the U.S. market in the second half of the year, given the massive stimulus package being considered by the incoming Barack Obama administration. AutoNation will announce its fourth quarter earnings on Jan. 29.
(AP photo of Mike Jackson, St. Petersburg Times files.)
-- Robert Trigaux, Times Business Columnist