Q&A: AutoNation CEO sees vehicle prices moderating this year

DETROIT (AP) — Prices of new and used automobiles are staggeringly high, and that's partly responsible for strong earnings last year by AutoNation, the country's largest dealership group.

Mike Manley, CEO of the Fort Lauderdale, Florida, company, said used-vehicle prices are starting to ease a bit, but he doesn't think new-vehicle supplies will improve much until the second half of this year.

New vehicles are scarce and prices are high because a global computer-chip shortage has forced all automakers to limit production.

Manley, whose appointment was announced in September, previously was head of the Americas region for Stellantis, formerly Fiat Chrysler.

AutoNation has over 300 store sites nationwide and made $1.37 billion in net income last year, up 260% from 2020.

Manley talked in an interview Thursday with The Associated Press. Questions are edited for length and clarity.

Q: AutoNation reported that used vehicle revenue was up 55% last quarter. Yet used vehicles were in short supply. Is the increase due to rising prices?

A: Our (sales) volume in used was up 21%, so you can see it’s a combination of volume, but also pricing. We did continue to see, through the fourth quarter, increases in terms of used-car pricing. I think that’s started to moderate particularly in cars two years and younger. So we’re seeing that moderation, which will, in my opinion, continue through this year.

Q: Edmunds.com had the average used-vehicle price at over $29,000 in January. If you're buying your first car, or your car gets totaled and you need to replace it but don't have a lot of money, is their any relief in sight?

A: Anyone who is adding to their fleet, or first time in, is picking up the brunt of that. I do think you are going to see improvements in inventory at that level....