David Hult: Absolutely. This is David. Keep in mind, Tekion is a fairly new company, and we’re excited. We’ve been talking with them for over 2 years. Working together to overcome obstacles and what both of us would need to do on our end to create the relationship. Tekion is a cloud-based DMS. The other DMS companies are not. The technology with the other legacy DMSs, unfortunately, require a tremendous amount of bolt-on software applications. So if you’re in our sales or service teams, you have multiple different applications open at the same time, which doesn’t make you efficient — doesn’t make you efficient in communicating internally or with the guest. With Tekion, again, in the building process, and we’ll launch 4 stores on the pod in the third quarter.
But with Tekion, we’ll have the opportunity to take off about 70% to 75% of the bolt-ons that we have, which will keep folks in one software base and make it easier for them to communicate internally and also in working with our guests. And the other thing that we find beneficial to us, right now, if you’re a customer one of our stores in Atlanta, when you go to another store in Atlanta, they can’t see what you did at the prior store. What we’re working on is a one customer profile with Tekion, which will allow any of our stores to see that customer transactions any stores that they did business with us. So there’s going to be efficiencies in marketing, there’s going to be efficiencies in productivity with employees, and there’s going to be a better guest experience.
Our belief is because our folks will be really living out of one software base and more comfortable interacting with them.
Operator: Our next question is from Rajan Gupta with JPMorgan.
Rajat Gupta: Great. I just had a couple of follow-ups to know some of the previous questions. The 59% to 60% SG&A comment for 2024, could you quantify like what kind of new and used GPU assumption are those based on and maybe even like new or used unit growth assumptions that underlying that expectation? And I have just a quick follow-up.
Michael Welch: Yes. As we stated on the new margin, this — we’ve kind of seen $300 decrease a quarter. We expect that to continue in ’24. So just that steady step down each quarter of $300. That is our expectation for next year. Used vehicles somewhere in line with what we’ve been doing. Again, we’re going to try to push the volume a little bit higher. And so that will keep that margin on the low — not the low side, we’re just in the same range that we’ve been. For SAAR, the piece there that we’ve kind of looked at is the SAAR range is kind of 15% to 16% is what we’ve seen out there for SAAR. So something in the high 15s is what we’re expecting from a new vehicle volume perspective. So those are the main drivers of those is $300 unit on new, coming down each quarter, used vehicle kind of staying in flat with gross profit and then new vehicle growing with those SAAR assumption in the high 15s. .
Rajat Gupta: Got it. Got it. That’s helpful. And just following on the Tekion question. Obviously, you’ve had this this transition. I think the stores and are not going to take on Tekion roll out across the board. When it’s all said and done, I mean, will you to quantify what kind of savings or efficiencies this might bring, like any just like numbers around that? And will there be any redundant expenses to factor in while this is — while this rollout is happening?
David Hult: Rajat, this is David. At this time, we’re not comfortable quoting a number, but I would tell you because of the lack of bolt-ons that we’ll have in working out of 1 DMS or 1 software application for the most part, we anticipate a nice tailwind to our SG&A expense. As we — third quarter, we’ll launch 4 stores in our shared service center on the East Coast. Our anticipation is allowing that to run through the end of the year, work out the kinks. And if all goes well, the beginning of ’25, we will start to roll out the rest of the company. And because of the Koons acquisition most recently just coming on, they would be the last ones to convert, and we would see them converting sometime in early ’26. So good progress if we get it through with Tekion, which we believe we are, we’re working really well with them and getting a lot done. We anticipate January rolling out all our stores, finishing up with Koons in the early part of ’26.
Michael Welch: And so from an expense savings perspective, that would be not much in ’24. So it’s more of a ’25, ’26 play for the expense savings. There will be some cost for kind of implementation of those things this year. A piece of that will be capitalizable. So there’ll be a couple of million dollars of expense for just the rollout this year building out the system.
Operator: [Operator Instructions]. Our next question comes from Glenn Chin with Seaport Research Partners.
Glenn Chin: So just revisiting some earlier comments. So first, on the Larry H. Miller stores. It sounds like TCA has been incorporated, but would you consider the Larry H. Miller group those stores fully integrated now?
Michael Welch: So on TCA, they were already fully integrated with LHTM as part of the So TCA, the integration was more TCA coming into the legacy Asbury stores as we rolled that out across the stores. And so always been It’s the legacy Asbury stores that have been rolling in. We have Florida left to do this year. And then acquiring Koons, will roll Koons on midyear this year as well. So those are the last 2 to kind of come on.
Glenn Chin: That’s great. I misspoke, I apologize for that. But otherwise, are they fully integrated into Asbury now?
Daniel Clara: Yes. Glenn, this is Dan. Yes, the LHM stores are fully integrated to Asbury.
David Hult: There is — the DMS conversion took place mainly in the third quarter into the fourth. And then we rolled out Parts and Service software kind of a bolt-on to our DMS. There are just a handful of stores left that we are rolling out right now, but it’s a very small amount.
