International Fortune 500 automotive retailer Group 1 Automotive, Inc. reported a 2020 second quarter net income of $30.2 million this week and a second quarter total revenue of $2.1 billion. “Rapid and deep cost cuts, combined with a quicker-than-expected U.S. auto market recovery, enabled us to achieve very strong operating results in the second quarter,” said Earl J. Hesterberg, President and Chief Executive Officer of Group 1 Automotive. Hesterberg attributes the positive financial report to his team’s ability to react quickly amidst the pandemic.
LIke many other automotive groups, the retailer experienced shutdowns in the majority of their markets, with their American sales and service business dropping 50% in April while their United Kingdom operations remained completely shut down. The company responded with a comprehensive cost reduction plan that Hesterberg says “touched all areas of the business.”
Although the year-over-year comparables show consistent decreases across the business, with total revenue declining by 29.1%, new vehicle revenues down by 32.1%, used vehicle revenues down 23.6% and parts and service gross profit down 26.5%, the company believes they have weathered the worst of the storm. Group 1 Automotive has already called back some of their furloughed employees as the company returns to 70% of their international pre-COVID employment levels.
Hesterberg states that Group 1 Automotive’s used vehicle and service businesses contributed to their recovery in May and June, aided by an existing online vehicle purchasing platform, Acceleride, which helped the company recoup profits as online vehicle shopping continues to increase across the industry.
