AutoNation CEO Anticipates Semiconductor Chip Crisis Will Extend To 2022: Bloomberg

AutoNation Inc AN CEO Mike Jackson believes the global semiconductor chip crisis extends to next year due to the lack of crisis resolution, Bloomberg reports.
Jackson expected the second quarter auto shipments to double year on year, which was not enough to fill dealer lots.
He also attributed the supply chain disruption to the pandemic-fueled semiconductor chip crisis leading to the supply chain bottlenecks for the auto industry.
Low interest rates, stimulus checks, and demand for personal transportation continue to drive demand for vehicles. At the same time, the assembly plants remained idle due to the chip crisis. AutoNation focused on second-hand car sales to counter the supply constraints.
AutoNation’s first-quarter EPS of $2.79 more than trebled on a year-on-year basis beating analysts’ estimates gaining from price hike and production cut in response to the crisis, Reuters reports. Revenue from existing stores rose 27% to $5.9 billion, exceeding projections.
Online sales accounted for over half of AutoNation’s sales, translating into lower cuts and higher profits from the rebound in the vehicle demand.
AutoNation acquired 11 stores and a collision center from Peacock Automotive Group, gaining $380 million in synergistic annual revenue during the first quarter.
Jackson expected more U.S. auto dealer consolidation fueled by higher online vehicle sales.
Price action: AN shares traded lower by 5.08% at $92.61 on the last check Tuesday.