AutoNation, Inc. (NYSE:AN) Q4 2022 Earnings Call Transcript

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David Whiston: And Mike, just a higher-level question. Having worked at both OEMs and dealers, I’d love to hear your perspective on contrasting the direct sale model that the EB were doing to the franchise model that you guys do. In your opinion, where is the key value for in having the dealer franchise model versus a direct to sales model, direct to consumer model?

Mike Manley: Well, when you buy me four beers and dinner, I’ll give you an answer to that question. Because it’s an incredibly complex question. But what I can tell you is that dealers are an invaluable part of the supply chain not only are they connected to the community, but the reality is that customers, given the amount of money that they are spending on vehicles and that price is going up and up having a relationship that they can trust on a local level where they know that their needs are going to be looked after whether there is an emergency service repair or something else at significant value. And at the end of the day, each of these OEMs are establishing their own individual brand position and those brand positions are enhanced and developed by their dealer bodies and therefore dealer bodies — the dealers and how they work with their OEMs in my opinion is invaluable and will always be invaluable and will not be replaced with a car turning up on the back of a truck.

David Whiston: Well, I appreciate that and I have a bar in my living room. You’re welcome anytime.

Mike Manley: Thank you. Just email me the address. It’s obviously — and I say and I don’t mean to be flipping it, it’s obviously a complex question, but I think there are lots and lots of OEMs have talked about the valuable nature of their dealer body and working together our ambition as partners of our OEMs is to just make sure that the customer journey is as seamless as it can possibly be that it really does represent the brand that the OEMs have spent years and billions of dollars to develop and it’s done in a transparent way. That means the customer feels that they continue to support it, not just through the purchase, but through the aftersales experience as well. And there’s always moving pieces, but that’s my genuine view on it. So with that, I think we are done. That was the last question. Is it right?

Derek Fiebig: Yes.

Mike Manley: Again, thank you all for joining us. And our fourth quarter results that we’ve just discussed were capping off a record year for us. And we’ve really focused this year, not just on our earnings, but also our customer experience. And I’d like to just say to our associates who are on the call thank you for the things that you have done. There’s no doubt we continue to perform in this current environment, but we are also taking the steps that I touched on at the beginning, so that we can really be a big player and take part of the industry transformation that is coming. So the expansion of our footprint, the additional transportation solutions, how we thought about our cash flow and the investments that we’ve made, including return to shareholders, I think, are all examples of that.

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