Q2 new-car gross profits drop for 6 public auto dealers

Asbury had a larger days’ supply of Stellantis vehicles than other Detroit 3 brands, yet gross profit per Stellantis vehicle hadn’t fallen significantly behind Ford or General Motors vehicle margins, Hult said.

“We’re really pleasantly surprised,” he said. “All three manufacturers are very similar.”

Group 1 reported $4,651 in gross profit per new vehicle in the U.S. during the second quarter, down 20 percent from a year earlier, just ahead of Lithia’s gross profit per new retail vehicle of $4,635, down 22 percent year over year. Lithia’s results in 2023 include sales in Canada and the United Kingdom.

AutoNation’s gross profit per new vehicle dropped 25 percent in the second quarter to $4,607. That was partially offset by an 8 percent jump in new-vehicle sales, the company said.

Margins will continue to moderate because of higher interest rates, rising inventory levels and fewer vehicles being sold at sticker as incentives return, CEO Mike Manley told analysts in a July 21 call. Second-quarter incentives averaged about $1,700, up from $700 a year earlier, but Manley said they’re still well below the $4,000 pre-pandemic average.