Group 1 Automotive’s earnings rose to completely new records thanks to an increase in sales of used cars, Earl Hesterberg, the firm’s president in addition to CEO, told CNBC on Thursday.
Same-store used car sales inside U.S. were up 11 percent inside quarter. “of which’s a number I’ve never seen before,” Hesterberg said on “Power Lunch.”
Sales of completely new vehicles also rose, 7.4 percent.
The company, the third-largest auto retailer inside U.S., beat Wall Street’s expectations Thursday when of which posted a 44 percent increase in quarterly profits.
Hesterberg credits the increased sales in used vehicles for the jump in addition to said internal measures were put in place to promote used vehicle offerings. Those included focusing on lower-priced used cars of which were once sent to auction in addition to adjusting the amount of money salespeople can earn through selling used cars.
“Typically you make a little bit more margin on a used car than you do on a completely new car,” he said.
“of which’s a not bad business,” Hesterberg said, adding of which sales have typically been higher in larger vehicles such as trucks in addition to SUVs.
“In markets like Texas, for us of which’s as much as 80 percent truck in addition to SUV … [inside U.S.] overall, probably closer to 70 [percent],” he said. “I wouldn’t say sedans are dead, yet of which’s certainly a shrinking part of our business.”