New-car sales are beginning to trend downward, said the Edmonton-based owner of 67 dealerships across Canada and the U.S.
AutoCanada Inc. sold 66,073 new and used cars during 2018, and while most of those were new, going forward the company expects to focus more on used-car sales.
After several record-setting years of new-car sales, analysts see higher interest rates making financing less affordable for vehicle shoppers. In addition, a general slowdown in the U.S. and Canadian economies may also contribute to fewer new-car sales.
But AutoCanada still expects overall sales to remain generally healthy.
“We expect to materially increase the number of used vehicles we retail,” the company said in its year-end financial statement. “Margins on used vehicles tend to be higher than new vehicles and retailing more vehicles will increase our returns from our finance and insurance and our parts and service lines of business. In addition, we are implementing a number of initiatives to increase the returns from our parts, service and collision businesses.”
AutoCanada began in 2006 with one Chrysler dealership in Edmonton.
Today, the company operates dealerships in eight provinces and in Illinois, with more than 4,200 employees overall. AutoCanada currently sells 28 vehicle brands including Chrysler, Ford, Toyota Honda and Mercedes-Bencz.
Consolidated revenues for 2018 were about $3.2 billion, and although there was a net loss on the year, earnings before income taxes, depreciation and amortization (EBITDA) attributable to shareholders were $56.3 million, compared to $111 million the previous year.
AutoCanada shares closed at $11.74 on March 15.
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