“Our aim is not to develop shortly,” Hult stated. “Our aim is to develop thoughtfully and be nice capital allocators for our shareholders.”
Asbury’s plan would have it including 75 or so extra dealerships with annual new-vehicle gross sales rising considerably.
Asbury ranked No. 5 on Automotive News‘ most recent list of the top 150 dealership groups primarily based within the U.S., with retail gross sales of 109,910 new automobiles in 2021. However that quantity understates simply how massive Asbury has change into. As an example, gross sales gained with the Larry H. Miller buy, which closed in mid-December, are barely mirrored in that rely.
Gross sales within the first quarter of 2022 present a clearer image.
Asbury final week stated it offered 39,174 new automobiles throughout that three-month interval, up 44 % from a yr earlier. That was larger than the 29,498 new automobiles reported offered within the U.S. by Group 1 Automotive Inc., No. four on the Automotive Information checklist.
It additionally seemingly was larger than U.S. new-vehicle gross sales by No. three Penske Automotive Group Inc. Penske does not get away U.S.-only figures however stated usually 65 % of its new-vehicle gross sales come from the U.S. Provided that, Automotive Information estimated that Penske offered about 30,000 new automobiles within the U.S. through the first quarter.
AutoNation Inc., No. 1 primarily based on 2021 gross sales, reported promoting 56,442 new automobiles within the U.S. through the first quarter, whereas fast-growing Lithia, No. 2 primarily based on 2021 outcomes, reported new-vehicle gross sales of 64,942 for the interval, together with a small however undisclosed quantity offered in Canada.
It is not clear whether or not these patterns will persist. Asbury additionally offered seven stores between mid-February and April 1, and people divestitures, within the absence of recent acquisitions, will scale back its new-vehicle gross sales tempo.
Nevertheless it’s evident that Hult’s plans for Asbury are massive and daring.
“It was a really robust message,” analyst Daniel Imbro of Stephens advised Automotive Information. After listening to Hult and different firm leaders speak in regards to the plan, “I felt extra assured that they might get there.”
Seaport Analysis senior analyst Glenn Chin final week referred to as the rise from the dealership group’s previous target of $20 billion stunning.
However whereas “undoubtedly bold,” the $32 billion plan is possible, Chin stated.
J.P. Morgan analyst Rajat Gupta stated the aggressive targets set by Asbury and Lithia, which seeks $50 billion in revenue by 2025, should not stress the opposite 4 main public teams into related declarations. Whereas they’re going to take into consideration their capital allocation and enterprise plans, they seemingly will not jettison their particular person progress methods in response, he stated.
The others have comparable skills and alternatives and are most likely taking related actions, simply not asserting it, Gupta stated.