“New light-vehicle inventories have begun to replenish,” Antony told analysts. Supply is starting to normalize, he added, though “is not fully there,” with pent-up demand remaining in the market.
In the used segment, which has taken on a larger share of AutoCanada’s business since the pandemic, profitability was up considerably.
In Canada, company gross profit per used vehicle rose to $2,320, an increase of 35 percent from the same period last year. In the U.S., the metric jumped 161 percent to $2,435 per vehicle.
Antony said the higher profitability was a result of selling more used vehicles with less inventory, crediting dealerships with improving the amount of time it takes to recondition trade-ins and other used inventory for resale.
Decreasing used-vehicle turn time remains a work-in-progress, Antony added, but one expected to continue to boost the bottom line. Average gross profit per vehicle hovers around $2,300 for a car sold during its first 60 days in inventory, he told analysts. It falls to $1,339 for a vehicle on the lot between 61 and 90 days, and to $437 for a used vehicle sold after being in inventory between 91 and 120 days.
“You are essentially holding a melting ice-cube. … The faster that we can sell that car, the more money can be made on it,” Antony said.
AutoCanada shares spiked following the release of the company’s second-quarter results, with shares up more than 15 percent over the following two trading sessions.
