Name: AutoNation CEO Says Auto Sales Are 'Pretty Strong' and Consumers Are in 'Good Shape'
Uploaded: 2019-10-15
Duration: 5 min 36 s
Description: AutoNation is the world's largest dealership and CEO Cheryl Miller says there's strong demand for SUVs, trucks, and 'nearly new' vehicles.

[ SOUND ] Carol, this is a challenging time for you to take over as the new CEO of Auto Nation. You know, we look and see the economy is slowing, auto sales are weak. What is your take on the outlook for auto sales for the rest of this year and going into 2020? So the way I see it, Suzy, is the customer's in pretty good shape, so I feel reasonably good about where auto sales are and where they're gonna be for the balance of the year. Certainly, the business is [ UNKNOWN ], but it's at a pretty strong point still. Where do you see most of the growth coming from? The two places that I see growth in automobile sales is nearly new, is the first one. So as the customer Looks at the affordability for new vehicles. If you look at the data, the average monthly payment for new vehicles $ 550 a month. That's a lot for some customers. So we're seeing people shift into nearly new. And then the second place we're seeing demand is in trucks and SUVs. So if you think about the industry and the data 70 % of purchases are in trucks and SUVs, so that's really where we're seeing the customer. State their preferences in the market. So you have these AutoNation USA stores which deal with these pre- owned vehicles. Do you see that it makes sense to add on more of them, given what you're saying about newly new? So we have five AutoNation USA stores and we love that customer proposition, so that's no haggle. It's transparent for the customer. It's a one price fixed price methodology in those stores and the customer loves that. We're gonna be smart about it, we've built five we've paused. We've gotten those to break even. And we're gonna continue to work on that business and see how much more opportunity there is within that really strong, nearly new segment of the business. You talked about the consumer in good shape just a moment ago, and I know you do spend a lot of time going and visiting dealerships, and talking to customers. What are you hearing from them? Tell us a little a little bit more color on that. What is the consumer mindset? They love the new product. They're interested about electric, so if you think about electric only 1 million of US vehicles today are electric. Out of a car park of 278 million. And so, it's still small. But they're interested in learning a little bit more. And from customers, they still wanna purchase. And they still want to service with us. And as you think about complexity of vehicles, customers are increasingly interested in their dealers. And servicing at auto nation because of the technical complexity of the vehicle and they feel comfortable that we know that and can manage that for them, fix it right the first time .>> But when you talk to customers, to what extent do the scary headlines we're seeing whether it's about. Trade conflicts, stock market sell- off, recession worries, impacting their confidence. So one of the things that's been interesting over the last couple weeks is customers now know the phrase inverted yield curve. Right, when they see headlines, it does put them on pause for a minute. But we do feel like with the amount of jobs, and the employment rate within the country that we're still seeing good interest in purchasing and servicing vehicles. Yeah, pricing is so important for consumers. And we've seen more and more consumers, especially the milennials are doing comparison shopping online. They are. And buying A vehicles online. To what extent are you changing or updating the ways that you sell vehicles? So our donations when working on digital for years, and so we have the ability to search vehicles online reserved vehicles online apply for financing we want to meet the customer where they are. So some millennial customers love Going through online. And some of our other customers say wait a second, this is the second biggest ticket item I'm gonna buy in my lifetime and I'm not quite comfortable there yet. So we wanna have the right offerings to meet the customer where they are. I'm sure there are things that you've always wanted to try out or experiment with and do differently at automation. And now that you're in the driver's seat, what are your plans? What do you want to do differently? One of the things I like to do is continue to focus on the future. So thinking through mobility and how we continue to be a best- in- class provider. And mobility. I'm also focused on a continued increase in diversity. So as I think about the workforce of the future, what does that look like. How do we upscale jobs within digital, within robotics. Those are some of the things that I'm really excited about working on. So where does Weibo fit in with your strategy? How important is it? This partnership that you have with Google. And what the way my relationship shows is how relevant we are in mobility in the future. So when people ask the question about bricks and mortar and what is auto retail look like in the future, we're on the ground floor with respect to that. So we're learning Along with WAYMO, how to service these really complex vehicles and what that looks like with respect to customer preferences. Are customers excited, are they afraid? What does the future look like? There's a lot of talking curiosity about autonomous vehicles, how far off do you think it is before those kind of vehicles will be sold in lots in autonation So when I think about autonomy, it's relatively small today. And when you think about the size of the US cars on the road, there's 278 million cars on the road so it's gonna be a long time with the average. Of those cars being 12 years old nearly. So it's going to be a long time before there's a lot of autonomous vehicles out on the road at scale, but we're certainly partnering to help make some of that a reality. [ BLANK_AUDIO ]

AutoNation CEO Says Auto Sales Are 'Pretty Strong' and Consumers Are in 'Good Shape'

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AutoNation is the world's largest dealership and CEO Cheryl Miller says there's strong demand for SUVs, trucks, and "nearly new" vehicles.