AutoNation
AutoNation, Inc. is an American automotive retailer headquartered in Fort Lauderdale, Florida, that operates as a provider of new and pre-owned vehicles, parts, and repair services through a network of dealerships across the United States.[1][2]
Founded in 1996 by H. Wayne Huizenga as a spin-off from Republic Industries, AutoNation pursued an aggressive acquisition strategy to consolidate the fragmented dealership market, establishing itself as the largest automotive retailer in the country by number of locations.[3][1]
The company divides its operations into segments focused on domestic brands, imports, and premium luxury vehicles, serving customers via over 300 locations in 21 states and employing more than 25,000 associates.[1][2]
Since November 2021, Michael Manley has served as chief executive officer, guiding AutoNation to annual revenues exceeding $26 billion in 2024 while maintaining its position among Fortune's most admired companies in the sector.[4][5][6]
History
Founding and Early Expansion (1996–2000)
AutoNation was founded in 1996 by H. Wayne Huizenga, the entrepreneur behind Waste Management and Blockbuster, as a division of Republic Industries, Inc., which he controlled. The initial concept focused on used-car superstores offering fixed pricing to streamline the buying process and reduce haggling, with Republic establishing 12 such locations that year. Concurrently, Republic began an aggressive acquisition strategy for new-car dealerships, marking a shift toward consolidating the fragmented automotive retail sector, while also purchasing National Car Rental for $600 million to bolster related operations.[3][7] In 1997, following the spin-off of its waste management operations into Republic Services, Inc., Republic intensified its automotive focus, acquiring hundreds of dealerships and rebranding select new-car franchises under the AutoNation name, such as "John Elway AutoNation" in Denver. This period saw rapid growth, with the company expanding from 111 dealerships at the start of 1997 to 223 by the end of 1998 through major purchases, including large groups like Maroone Enterprises. The strategy emphasized national branding akin to consumer giants like McDonald's, aiming to create a one-stop automotive retail network across major metropolitan markets.[3][8] Republic Industries officially rebranded to AutoNation, Inc., on April 6, 1999, reflecting its pivot to automotive retail dominance, and separated operations into AutoNation Retail Group for dealerships and AutoNation Rental Group for car rental brands. That year, AutoNation acquired 16 additional dealerships across California, Colorado, Florida, Texas, and Washington for $200 million, adding $1 billion in annualized revenue, while launching AutoNationDirect.com for online sales. It also closed 23 of 29 underperforming used-car superstores, integrating survivors into new-car franchises to optimize profitability. By December 31, 1999, AutoNation operated more than 400 new vehicle franchises in 26 markets across 19 states, predominantly in the Sunbelt. In 2000, it spun off its rental division as ANC Rental Corp. on June 3, further streamlining its core retail business, and reported selling over 1 million vehicles amid $20.6 billion in revenue.[9][10][11][12]Consolidation and Peak Growth (2001–2008)
Following the rapid acquisitions of the late 1990s, AutoNation shifted toward operational consolidation under CEO Michael Jackson, who assumed the role on October 11, 1999, and became chairman in 2002. The company divested non-core and underperforming assets, including the completion of the ANC Rental spin-off in 2000 and selective sales of dealerships, such as returning stores to prior New Jersey owners in 2000, to streamline its portfolio toward profitable franchised new-vehicle outlets. This strategy emphasized integration of existing stores, reduction of overhead, and enhancement of customer-facing operations, moving away from the earlier megastore model that had proven less viable. By focusing on core markets, AutoNation improved inventory turnover and same-store performance, with first-quarter 2001 earnings per share of $0.17 exceeding analyst expectations amid reduced new-vehicle days supply by 24 days.[13][14][15] Revenue stabilized at high levels during this period, reflecting successful consolidation rather than aggressive expansion, with annual figures reaching $19.47 billion in 2002 before modest annual declines to $18.98 billion by 2005 due to market fluctuations and divestitures of lower-margin operations. The company optimized its network by acquiring select high-value groups, such as Laurel Motors in November 2001, while prioritizing returns through $2 billion in authorized stock repurchases since 1998, including an additional $250 million in October 2001. Store count grew to 322 franchised new-vehicle dealerships by December 31, 2007, concentrated in key U.S. regions, supporting consistent profitability with net income around $0.59–0.62 billion from 2002 to 2005. This phase marked peak operational efficiency prior to the 2008 downturn, as AutoNation's focus on franchised brands aligned with industry trends toward consolidation of domestic marques.[16][17][18][19] Strategic initiatives included centralizing back-office functions and trimming regional management layers, such as eliminating 50 positions in September 2004 to cut costs and enhance decision-making agility. AutoNation also advanced its brand uniformity by co-branding initiatives and preparing for broader market shifts, later evidenced by its 2009 endorsement of General Motors' dealership rationalization, which echoed its own post-2000 playbook of exiting weaker points. These efforts yielded improved margins and positioned the retailer as the largest U.S. automotive operator by revenue in the $700 billion new-vehicle market by 2005, with twice the sales of its nearest competitor.[20][21][22]Restructuring and Adaptation (2009–present)
Following the 2008–2009 financial crisis, which severely impacted new vehicle sales, AutoNation implemented aggressive cost-reduction measures, achieving a $100 million annual run-rate savings by early 2009 through operational efficiencies and workforce adjustments.[23] The company shifted emphasis toward used vehicle retailing to maintain inventory strength and profitability, adopting tactics such as direct acquisition and retail of trade-ins rather than wholesale dispositions, which helped stabilize gross profits amid depressed new car demand.[24] In May 2009, AutoNation endorsed General Motors' dealership consolidation plan, aligning it with its own long-term strategy of rationalizing underperforming domestic franchises to improve network efficiency.[22] By the late 2010s, facing renewed pressures from softening new vehicle sales and rising operational costs, AutoNation announced a major restructuring in January 2019, targeting $50 million in annual savings via corporate realignment, regional consolidation from three to two structures, and executive departures including Chief Operating Officer Cheryl Patzner.[25][26] This initiative aimed to enhance agility in used vehicle operations and parts/service segments, which became key profit drivers as new car margins compressed. Leadership transitions followed, with CEO Mike Jackson's planned retirement leading to Carl Liebert's brief tenure starting March 2019, his ouster after four months, and Cheryl Miller's appointment as interim CEO in July 2019 before Jackson's continued oversight until 2022.[27][28] Into the 2020s, AutoNation extended streamlining efforts amid the COVID-19 pandemic, further consolidating regions and cutting costs while achieving record results in used vehicle sales and digital engagement.[29] The company expanded its AutoNation USA pre-owned vehicle brand and invested in omnichannel capabilities, including online sales tools and mobile services, to adapt to consumer shifts toward digital retailing.[30] Under new CEO Mike Manley, appointed in April 2022, AutoNation prioritized infrastructure upgrades for electric vehicles (EVs), advocating for revised buying processes to accommodate longer EV sales cycles and integrating EV sales/service into its network despite slower-than-expected adoption.[31] These adaptations focused on sustaining profitability through diversified revenue streams, with parts and service gross profits rising amid aging vehicle fleets and supply chain disruptions.[29]Business Operations
Vehicle Sales and Inventory Management
AutoNation operates as one of the largest automotive retailers in the United States, retailing new vehicles from major manufacturers including Ford, General Motors, Toyota, and others through its network of approximately 300 locations. In 2024, the company sold 254,715 new vehicles, reflecting its significant market position. New vehicle revenue for the full year 2024 totaled $12.9 billion, marking a 2% increase from 2023, driven by higher unit volumes amid recovering supply chains post-semiconductor shortages. Used vehicle sales, comprising retail, wholesale, and customer trade-ins, generated $7.4 billion in revenue for the same period, down 8% year-over-year due to softer demand and competitive pricing pressures.[32][33] The company's sales approach integrates physical dealership operations with digital platforms, enabling online browsing, virtual tours, and home delivery options to capture a broader customer base. In the second quarter of 2025, same-store new vehicle unit sales rose 8% to 65,334 units, while used vehicle sales increased 6% to 68,398 units, supported by targeted marketing and inventory matching tools. AutoNation emphasizes unit profitability over volume, with gross profit per new vehicle unit typically maintained through manufacturer incentives and efficient pricing strategies aligned with regional market data.[34][35] Inventory management at AutoNation prioritizes low days supply to minimize holding costs and depreciation risks, with new vehicle inventory monitored against net realizable values to avoid impairments. As of the third quarter of 2025, new vehicle days supply was 47 days on an industry-standard basis, down from 52 days in the prior year, while used vehicle days supply remained stable at 37 days based on trailing calendar month sales. The company ended Q2 2025 with approximately 41,000 units of new vehicle inventory, representing 49 days of supply, a reduction from prior periods reflecting disciplined acquisition practices. Inventory turnover ratios have averaged around 6.44 in recent fiscal years, indicating efficient cycling of stock compared to industry peers.[36][37][38] AutoNation's scale enables superior inventory responsiveness, allowing it to fulfill customer requests more effectively than smaller retailers by maintaining diverse stock across brands and models. Key practices include data-driven forecasting, regular audits, and technology integration, such as the proprietary Equity Mining Tool, which automates trade-in appraisals and recommends suitable replacements from existing inventory to accelerate sales cycles. The company also leverages advanced analytics for demand prediction and reconditioning processes, particularly for used vehicles, to optimize wholesale and retail dispositions. These strategies contribute to sustained gross margins, with no material new vehicle inventory impairments reported in recent filings.[14][39][36]Aftermarket Services and Parts
AutoNation operates extensive aftermarket services through its network of over 300 dealership locations, providing vehicle maintenance, repairs, and collision repair services. These fixed operations, often referred to as "parts and service" or "after-sales," include routine tasks such as oil changes, brake servicing, tire rotations, and diagnostic checks performed by factory-trained technicians known as TechXperts.[40] The company maintains over 50 dedicated collision centers for body repairs and full restorations, equipped to handle dings, dents, and structural damage.[40] Services emphasize upfront pricing and extended hours, including evenings and weekends, to accommodate customer schedules.[41] In parts distribution, AutoNation supplies both genuine original equipment manufacturer (OEM) components and aftermarket alternatives, stocking items like brake pads, air filters, spark plugs, and more complex assemblies.[42] The company launched AutoNationParts.com on October 31, 2023, an e-commerce platform allowing direct-to-consumer purchases of parts and accessories with home shipping, aiming to expand beyond dealership channels.[43] Additionally, AutoNation maintains a wholesale parts network serving over 30 manufacturer brands, focusing on competitive pricing and rapid delivery for professional and retail buyers.[44] Financially, parts and service operations have grown significantly, with annual sales reaching $4.6 billion in 2024, up from $2.4 billion in 2012, driven by increased vehicle ownership durations and demand for repairs amid supply chain recoveries.[45] In the second quarter of 2025, same-store service and parts revenue increased 12% year-over-year, contributing to a record after-sales gross profit of $599 million, a 12% rise, underscoring the segment's high-margin stability compared to vehicle sales.[46][47] This performance reflects broader industry trends where fixed operations provide consistent profitability, often offsetting volatility in new vehicle margins.[48]Financing and Insurance Offerings
AutoNation facilitates vehicle financing through partnerships with numerous banks, credit unions, and lenders nationwide, enabling customers to apply for loans or leases via an online pre-qualification process that does not initially impact credit scores.[49] This includes options for buyers with varying credit profiles, including bad or no credit, with competitive rates determined by dealer negotiations on behalf of the customer.[50] In 2022, AutoNation launched AutoNation Finance in collaboration with TruDecision, utilizing advanced analytics to enhance approval processes and tailor financing strategies for retail purchases.[51] Additionally, for service and accessories, AutoNation offers a branded credit card with promotional no-interest periods—such as six months if paid in full—and partners with providers like Sunbit for short-term, low-interest payment plans ranging from three to 18 months.[52] In 2021, it introduced AutoNation Pay through DigniFi, a financing solution specifically for repair and maintenance services, matching customers to suitable options post-application.[53] In the realm of insurance-like products, AutoNation primarily sells vehicle protection plans rather than standard auto liability coverage, focusing on extended mechanical warranties, maintenance contracts, and gap insurance administered through its dealership network.[54] The flagship AutoNation Vehicle Protection Plan, introduced in 2015, provides tiered coverage levels—Platinum, Gold, Silver, Powertrain, and Engine—for repairs on major systems like engine, transmission, and drivetrain, covering parts and labor for eligible breakdowns beyond manufacturer warranties.[55] [56] Complementary offerings include the Vehicle Care Program, which locks in prepaid maintenance costs for oil changes, tire rotations, and other routine services at current rates; Guaranteed Asset Protection (GAP) to cover loan balances exceeding insurance payouts in total loss scenarios from accidents, theft, or disasters; and Appearance Protection for exterior paint, interior fabrics, and undercarriage repairs against wear or damage.[57] [58] [59] Specialized add-ons encompass Tire & Wheel Protection for road hazard damage and roadside assistance for towing or emergencies, all bundled or sold separately to mitigate post-purchase ownership risks.[60] These plans are backed by dealer servicing and emphasize comprehensive, customizable safeguards, though coverage exclusions and deductibles apply per contract terms.[61]Corporate Governance and Leadership
Founders and Executive Team
AutoNation was founded in 1996 by H. Wayne Huizenga, the entrepreneur behind Waste Management and Blockbuster Video, initially as a subsidiary of his Republic Industries conglomerate to consolidate automotive retail through acquisitions of dealerships and superstores.[5] Steven R. Berrard co-founded the company with Huizenga and served as co-chief executive officer from 1996 to 1999, overseeing early expansion before stepping down to pursue venture capital interests.[62] Huizenga provided strategic vision for nationwide scale but retired from active involvement on May 12, 2004, to focus on private ventures.[63] As of 2025, Michael Manley leads as chief executive officer and director, appointed in November 2021 after executive roles at Fiat Chrysler Automobiles, including CEO of its North American operations.[64] Thomas A. Szlosek serves as executive vice president and chief financial officer, joining in 2023 with prior experience in automotive finance from Cox Automotive.[65] Gianluca Camplone holds the position of chief operating officer, focusing on parts and business development.[66] Jeffrey Butler acts as president of AutoNation Finance, managing financing and insurance segments.[66] This team emphasizes operational efficiency and digital integration amid market challenges.[67]Board Structure and Decision-Making
AutoNation's board of directors consists of nine members, with eight classified as independent under New York Stock Exchange standards, excluding Chief Executive Officer Michael Manley.[68] Rick L. Burdick serves as the independent Chairman, a position he has held since May 1991, bringing expertise from his prior role as a partner at the law firm Akin, Gump, Strauss, Hauer & Feld, L.L.P., and current chairmanship of CBIZ, Inc.[64] The board's composition emphasizes directors with backgrounds in corporate finance, investment banking, capital markets, and executive leadership to support oversight of the company's automotive retail operations.[64] The board operates through three standing committees, each composed entirely of independent directors: the Audit Committee, chaired by David B. Edelson with members Claire Bennett and Lisa Lutoff-Perlo; the Compensation Committee, chaired by G. Mike Mikan with members Rick L. Burdick and Norman K. Jenkins; and the Corporate Governance and Nominating Committee, chaired by Jacqueline A. Travisano with members Robert R. Grusky and Lisa Lutoff-Perlo.[68] These committees assist the full board by addressing specialized areas, including financial reporting and auditor oversight (Audit), executive compensation and incentives (Compensation), and director nominations, governance practices, and board evaluations (Corporate Governance and Nominating), with responsibilities outlined in their respective charters.[69] Directors are elected annually by a majority vote of stockholders for one-year terms, with the Corporate Governance and Nominating Committee recommending candidates based on criteria such as independence, expertise, and diversity of skills.[68][69] The board convenes at least five times per fiscal year, with agendas prepared by the Chairman and materials distributed in advance; non-management directors hold regular executive sessions, and independent directors meet at least annually without management present.[69] As the company's ultimate decision-making body, the board directs business affairs, oversees strategic planning, capital allocation, CEO succession, and risk management—including financial, operational, and cybersecurity risks—while delegating detailed reviews to committees before full board consideration for major actions.[70][68] Annual self-evaluations of the board and committees, facilitated by the Corporate Governance and Nominating Committee, ensure ongoing effectiveness in these oversight functions.[69]Financial Performance
Revenue Breakdown by Segment
AutoNation's revenue is derived mainly from new and used vehicle sales, after-sales activities encompassing parts, service, and collision repair, and finance and insurance products sold to customers. In the fiscal year ended December 31, 2024, total revenue reached $26.765 billion, reflecting a 0.7% decline from 2023 primarily due to lower used vehicle prices amid market normalization.[71][72] New vehicle sales formed the largest revenue source at $13.048 billion, or 48.8% of total revenue, driven by higher unit volumes and stable manufacturer pricing.[71] Used vehicle sales, comprising retail and wholesale transactions, contributed $5.075 billion, or 19.0%, down significantly from prior years as elevated post-pandemic prices receded.[71][72] After-sales revenue totaled $5.615 billion, or 21.0%, bolstered by consistent customer demand for maintenance and repairs independent of vehicle sales cycles.[71] Finance and insurance products, including loans, warranties, and protection plans arranged at dealerships, generated $2.014 billion, or 7.5%.[71] Other revenue, such as from alternative product sales and minor operations, accounted for the remaining $1.013 billion, or 3.8%.[71]| Revenue Category | Amount ($ millions) | Percentage of Total |
|---|---|---|
| New Vehicle Sales | 13,048 | 48.8% |
| Used Vehicle Sales | 5,075 | 19.0% |
| After-Sales (Parts, Service, Collision) | 5,615 | 21.0% |
| Finance and Insurance | 2,014 | 7.5% |
| Other | 1,013 | 3.8% |
| Total | 26,765 | 100% |
Profitability Trends and Metrics
AutoNation's profitability metrics exhibited a peak during the supply-constrained automotive market of 2021, followed by a downward trend through 2024 as vehicle gross profits normalized amid increased inventory availability, softer used-vehicle pricing, and elevated interest rates compressing finance and insurance (F&I) revenues. Net income reached $1.377 billion in 2021, supported by high per-unit vehicle profitability, before declining to $1.021 billion in 2022, $692 million in 2023, and $634 million in 2024.[75] This contraction reflected a net profit margin drop from approximately 5.1% in 2021 to 2.3% in 2024, with trailing twelve-month margins at 2.37% as of mid-2025.[76] EBITDA mirrored this pattern, declining from roughly $2.23 billion in 2022 to $1.882 billion in 2023 and $1.555 billion in 2024, yielding EBITDA margins that compressed from 7.04% in 2022 to 4.94% in 2024.[77] Operating margins followed suit, averaging 7-8% during the 2021-2022 peak but stabilizing at 4.7% on a trailing twelve-month basis by 2025, pressured by higher operating expenses relative to gross profits.[76] Gross margins, which benefited from scarcity-driven pricing in earlier years, averaged 18.6% from 2020 to 2024 but trended lower to 17.9% in recent periods, with quarterly figures around 17.6% in Q3 2025.[78]| Year | Net Income ($ millions) | EBITDA ($ millions) | Gross Margin (%) | Operating Margin (%) |
|---|---|---|---|---|
| 2021 | 1,377 | 2,200 (approx.) | 19.0 (approx.) | 8.2 (approx.) |
| 2022 | 1,021 | 2,230 | 18.5 (approx.) | 7.0 |
| 2023 | 692 | 1,882 | 18.0 (approx.) | 6.0 (approx.) |
| 2024 | 634 | 1,555 | 17.9 | 4.7 |
Recent Fiscal Results (2023–2025)
In fiscal year 2023, AutoNation achieved total revenue of $26.9 billion, reflecting growth driven by increases in new vehicle sales and after-sales services, though used vehicle revenue declined by 15% to $8.2 billion.[81] After-sales revenue rose 11% to $4.5 billion.[81] GAAP diluted EPS for the fourth quarter reached $5.04, with adjusted EPS at $5.02.[81] Fiscal year 2024 saw revenue contract slightly to $26.8 billion, a decline of less than 1% from 2023, amid softer used vehicle demand and normalizing new vehicle pricing.[82] Net income fell 32% to $692.2 million year-over-year.[82] Fourth-quarter revenue increased 8% on a same-store basis to approximately $7.2 billion, supported by 12% growth in new vehicle same-store unit sales; GAAP EPS was $4.64, and adjusted EPS $4.97.[33] Through the first three quarters of 2025, AutoNation demonstrated revenue expansion and improved adjusted profitability amid recovering vehicle volumes. First-quarter revenue rose 3% year-over-year to $6.7 billion, with adjusted EPS up 4% to $4.68, though net income declined 8% due to lower gross profit per new vehicle.[83][84] Second-quarter revenue grew 8% to $7 billion, driven by new vehicle and finance services gains; adjusted EPS surged 37% to $5.46, despite a GAAP EPS drop to $2.26 and net income decrease to $86.4 million from higher operating expenses.[74][35] Third-quarter revenue increased 7% to $7 billion, with after-sales gross profit at $597 million; GAAP EPS rose 23% to $5.65, and adjusted EPS 25% to $5.01.[37]| Period | Revenue ($B, YoY Change) | Adjusted EPS (YoY Change) |
|---|---|---|
| FY 2023 | 26.9 (N/A) | N/A |
| FY 2024 | 26.8 (-<1%) | N/A |
| Q1 2025 | 6.7 (+3%) | 4.68 (+4%) |
| Q2 2025 | 7.0 (+8%) | 5.46 (+37%) |
| Q3 2025 | 7.0 (+7%) | 5.01 (+25%) |