So I think you need to look at that. So the distribution of our day supply is much lower in other divisions. The second thing, and I touched on this before, the good news about our balanced business, the really good news about our balanced business is we have different sources. And as I mentioned, we came out the first quarter, I was pleased with the efficiency of our stock count on our used vehicles, but I did think and the team felt that we probably constrained ourselves. So we spent a lot of time rebuilding that — and you’ll see quite a change in our used vehicle inventory from the end of Q1 through to the end of Q2. That process hasn’t finished because I still think that we can put more inventory and maybe because I think the market is robust.
And obviously, if we do see a shortfall in terms of our domestic businesses on new vehicle sales because we get to a level of inventory that really is constraining sales to a large extent, we will have the ability to switch on and refocus on our used sales as well as that increase in after sales that we’re seeing. But I would tell you, I think it’s going to be an interesting summer.
John Murphy: Thank you very much guys. I appreciate it.
Operator: Thank you. Our next question is from Daniel Imbro from Stephens. Daniel, your line is now open. Please go ahead.
Daniel Imbro: Mike, I want to follow up on that last question around the used business. Obviously, end market demand is choppy and you guys are moving your inventory around to address it. I guess two questions on that side. I guess, one, what is your outlook on when that affordability issue starts to get fixed? Are we seeing lenders extending terms any further? I’m just curious kind of how you position the inventory, if you can expand on that, if there’s any assumption there? And then strategically, last quarter, you guys I felt like focused more within a per unit profitability, maybe less focused on unit growth. GPU stepped down a bit more than we thought they would this quarter? Just kind of any change in your strategic thinking there around market share versus profitability per unit? And then how do you weigh those two factors in this current backdrop?
Mike Manley: Daniel, well, firstly, on the affordability, what we’re seeing is that mix is changing. So you saw the average price of used retail coming down, that’s pure mix change. We’re seeing prices — wholesale prices mitigating, they peaked in March. The last few months, they’re trending down much more normal depreciation pattern, which is bringing down net prices on used as well. Our terms, our periods are remaining solid. But we do know that we are competing against lenders that have increased the term that they’re prepared to offer in the marketplace to keep the balance and monthly payment. So at the end of the day, the equation, whether it’s price, whether it’s term, whether it’s accessories, the reality of what’s not changing is not changing very much is the monthly payment available.
And as always, we finding ways to still be able to maintain sales, and I think that will continue. Secondly, no, I still think we’ve got a very robust margin. It’s not a change in our focus at all. But even with that, I still think it’s important that we balance the volume that we want to achieve as well as taking, I think, a very deliberate approach to maintaining use margins. So I was pleased with the margin I think that there was more volume without an impact on a significant impact on margin. But we are in a period now where we’re seeing, as I said, a return to what we would consider more traditional depreciation in the used market, and we just have to stay very agile with pricing. So you’re going to see, as you always do, fluctuations in margin, but we want quality business, but we want our fair share of business.
