{"id":15872,"date":"2022-02-20T12:03:45","date_gmt":"2022-02-20T17:03:45","guid":{"rendered":"https:\/\/autosector.com\/?p=15872"},"modified":"2022-02-20T12:03:45","modified_gmt":"2022-02-20T17:03:45","slug":"car-discounts-thing-of-the-past-autonation-mike-manley","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=15872","title":{"rendered":"Car discounts won&#8217;t come back post-pandemic, AutoNation says"},"content":{"rendered":"<p>The largest <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/car-dealers\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:0;\">car dealership<\/a> chain in the U.S. said discounts on <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/research\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:1;\">new cars<\/a> may be a thing of the past as the auto industry seeks to lock in higher prices resulting from pandemic-induced production cuts.<\/p>\n<p>\u00a0Tighter inventories have allowed automakers and <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/car-dealers\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:2;\">dealers<\/a> to book\u00a0<a title=\"AutoNation Posts Record Profit as Used-Car Sales Eclipse New (1)\" href=\"https:\/\/archive.fo\/o\/TCCoX\/https:\/\/www.bloomberg.com\/news\/articles\/2022-02-17\/autonation-posts-record-profit-as-used-car-sales-outstrip-new\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:3;\">fat profits<\/a>\u00a0by selling more cars at or above their sticker prices, and the absence of discounts will persist even as vehicle production ramps up in the second half of 2022, the chief executive officer of AutoNation told investors in an earnings call Thursday.<\/p>\n<p>\u201cWe will not return to excessively high inventory levels that depress new-vehicle margins,\u201d AutoNation CEO Mike Manley said. \u201cSignificant discounting and high incentives can also damage a brand, which is another reason for our industry to balance appropriately supply and demand.\u201d<\/p>\n<p>Soaring vehicle prices and increased sales of <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/cars-for-sale\/vcond-Used\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:4;\">used cars<\/a> helped AutoNation post record profits in its latest quarterly earnings, which were announced earlier Thursday. The rising prices of new and used vehicles are contributing to the highest annual inflation in four decades.<\/p>\n<p>Executives at\u00a0<a title=\"Company Overview\" href=\"https:\/\/archive.fo\/o\/TCCoX\/https:\/\/www.bloomberg.com\/quote\/GM:US\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:5;\">General Motors Co.<\/a>\u00a0and\u00a0<a title=\"Company Overview\" href=\"https:\/\/archive.fo\/o\/TCCoX\/https:\/\/www.bloomberg.com\/quote\/F:US\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:6;\">Ford Motor Co.<\/a>\u00a0have signaled they will throttle production even as computer <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/tag\/chip+shortage\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:7;\">chip shortages<\/a> that have forced them to cut output start to ease. The two companies, which have long coped with large inventories on dealer lots that prompted discounting, are eager to preserve their higher profit margins.\u00a0<\/p>\n<p>At the same time, they\u2019ve called out <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/car-dealers\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:8;\">car dealers<\/a> charging above the suggested retail price. <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/ford\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:9;\">Ford<\/a> CEO Jim Farley told investors\u00a0<a title=\"Ford CEO Farley Says Dealers Who Gouge Could Get Fewer Vehicles\" href=\"https:\/\/archive.fo\/o\/TCCoX\/https:\/\/www.bloomberg.com\/news\/articles\/2022-02-04\/ford-ceo-farley-says-dealers-who-gouge-could-get-fewer-vehicles\" target=\"_blank\" rel=\"noopener noreferrer\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:10;\">earlier this month<\/a>\u00a0that about 10% of its dealers were charging above retail price, and that the company would withhold cars from them to root out the behavior.<\/p>\n<p>Car shoppers paid above the manufacturer\u2019s sticker price in more than 80% of new car purchases last month, according to researcher Edmunds. Manley said just <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/polestar\/2\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:11;\">2<\/a>% of <a class=\"injectedLinkmain\" href=\"https:\/\/www.autoblog.com\/research\/\" data-ylk=\"elm:context_link;itc:0;pos:1;sec:donut-hole;cpos:12;\">new vehicles<\/a> AutoNation sold in 2021 were above the sticker price.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The largest car dealership chain in the U.S. said discounts on new cars may be a thing of the past as the auto industry seeks to lock in higher prices resulting from pandemic-induced production cuts. \u00a0Tighter inventories have allowed automakers and dealers to book\u00a0fat profits\u00a0by selling more cars at or above their sticker prices, and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8313,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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