Latest OnLine Editon  Read Here

LEGAL UPDATE: Sean Petersen, NIADA senior vice president of legal and governmental affairs, talks about recent legal issues affecting independent dealers.  One change in Nevada regulates the use of starter-interrupt and GPS devices.

CarMax’s Mix Drives Earnings Higher

CarMax’s Mix Drives Earnings Higher Featured

Executives at CarMax Inc. attribute the company’s success to a pretty simple idea: selling what people want.

They said the mix of vehicles positively impacted their earnings in the company’s latest quarter. CarMax reported net earnings growth of 20.7 percent in its latest quarter.

The vehicle mix improved compared to last year’s offerings. Their percentage of sales in large and medium SUV’s and trucks rose to 27 percent, which is about three points higher than the prior quarter.

“So even last year, when we were little bit lower in large SUV’s and trucks, we were still putting what folks wanted to buy and what were also a good deal for them,” said CarMax CEO Bill Nash. “So I think the supply has increased on these vehicles and has driven price down somewhat but again we’re going to buy what the consumers want.”

The company’s new online appraisal initiative helped CarMax stock the right vehicles. The online system allows customers to receive a value for their vehicle before coming into the store.

CarMax executives view buying inventory directly from consumers as a better value proposition.

“It is more profitable than buying it off-site so we’re always trying to drive as much as possible through the line but even given this quarter where we were allowed a little more off-site purchases because the volume, we’re still able to maintain gross profit per unit,” Nash said.

Even though CarMax is stocking more SUV’s and minivans, the average selling price remains down a bit. Nash said that this could be attributed to the acquisition prices.

“I think this speaks to the execution that the stores are doing and the great things that are buyers do, making sure that they’re getting the best price and really at the end of the day that’s really where it starts,” Nash said. “You have got to buy the vehicles at the right price so lower acquisition prices more than offsetting the increase that you would normally see from the mix shift.” 

Last modified on Wednesday, 12 July 2017 16:05
Rate this item
(0 votes)
Manheim Debuts Mobile Auction

Manheim Debuts Mobile Auction

Manheim celebrated the grand opening of Manheim Wilmington on Sept. 15. Manheim's mobile auction presence in Wilmington, S.C., is one of the company's longest tenured.
With two lanes equipped for...

FTC Approve Fuel Guide Changes

FTC Approve Fuel Guide Changes

The Federal Trade Commission announced that the agency has approved changes to the Fuel Economy Guide.Adopted in 1975, the Guide (formally, the “Guide Concerning Fuel Economy Advertising for New Automobiles”)...

  • Columbus Fair Auto Auction Adds Compliance Department
    Columbus Fair Auto Auction  Adds Compliance Department Columbus Fair Auto Auction has developed its own compliance department.Angela Whitt has been named the auction’s compliance manager. Whitt will be focused on building a comprehensive program that is a…
    Written on Thursday, 28 July 2016 16:58
  • Firm Focuses on Safety
    Firm Focuses on Safety XLerate Group announced that nearly 800 employees and managers completed National Auto Auction Associaton’s Auction Safety Certification and Lane Safety Training initiatives. Since April 2016, those employees and management team…
    Written on Monday, 01 August 2016 12:46
  • BSC America Hires Manager
    BSC America Hires Manager Tommy Rogers has joined Bel Air Auto Auction as general manager of its Clayton Station Auction Center. As part of the BSC America management team, Rogers will also perform regional…
    Written on Sunday, 24 July 2016 16:09
  • ADESA Names Dealer Relations Director
    ADESA Names Dealer Relations Director ADESA announced that Trent Strauss has been promoted to director of dealer relations for ADESA, effective immediately. Strauss will report to Steve Dudash, vice president of dealer services. In his…
    Written on Wednesday, 28 September 2016 12:23
  • Depreciation Rates Improve
    Depreciation Rates Improve The average price of a used vehicle for model years 2011-15 depreciated by 1.5 percent during July, slightly better than June’s 1.7 percent, according to Black Book. The market performance…
    Written on Wednesday, 10 August 2016 14:59
  • NAAA Offers Support for Flooded Sale
    NAAA Offers Support for Flooded Sale National Auto Auction Association President Mike Browning drew attention to the victims of the flooding in Louisiana in a letter to members on Aug. 19, spotlighting member Oak View Auto…
    Written on Friday, 19 August 2016 14:40
  • Penske Reports Mixed Results
    Penske Reports Mixed Results Penske Automotive Group Inc. reported mixed results for its used-car operations in the second quarter.Used unit retail sales rose 6.8 percent, but same-store used unit retail sales declined 2.6 percent.Same-store…
    Written on Monday, 01 August 2016 17:56
  • City Honors Auction for Community Involvement
    City Honors Auction for Community Involvement Manheim Seattle won the City of Kent's “Best of Kent” award for the fifth consecutive year, qualifying the auto auction for the Kent Business Hall of Fame. The award is…
    Written on Wednesday, 03 August 2016 15:07
  • Cox Promotes Strategy VP
    Cox Promotes Strategy VP Cox Automotive has named Amy Mills senior vice president of strategy. In this role, Mills will work with Cox Automotive's executive leadership team to identify, execute and sustain strategic initiatives…
    Written on Thursday, 03 November 2016 20:51
  • Association Honors Charitable Auction
    Association Honors Charitable Auction ADESA Winnipeg, located in Winnipeg, Manitoba, Canada, has earned the inaugural 2016 Eastern Auction of the Year Award from the National Auto Auction Association. The award honors excellence in community…
    Written on Friday, 19 August 2016 14:40