AutoNation is purchasing 16 dealerships in 5 states

$200 million move aims to gain $1 billion in sales

July 09, 1999|By BLOOMBERG NEWS

FORT LAUDERDALE, Fla. -- AutoNation Inc., the world's largest auto retailer, is buying 16 dealerships in five states for about $200 million, increasing its presence in what it sees as high-growth markets.

AutoNation is buying seven dealerships from the York Automotive Group in Southern California. It also is acquiring Shamrock Ford in Dublin, Calif.; Phil Smith Toyota in South Florida; Courtesy Ford in Littleton, Colo.; and Steakley Chevrolet and Subaru in Dallas.

In the Seattle area, AutoNation is buying the Maria Smith Automotive Group, which has four dealerships. It also agreed to buy Prestige Ford in Bellevue, Wash.

The new dealerships will add about $1 billion in sales, the com- pany said. It had $16.1 billion in sales last year, more than its top six competitors combined.

AutoNation has paid cash for acquisitions since April 1988. Its shares have fallen by almost two-thirds since early 1997, when they rose to $44.375. Investor enthusiasm waned because of losses in its used-car business.

AutoNation's shares fell 56.75 cents to $15.50 yesterday .

The company has tried to increase profit by putting more emphasis on new cars. In December, it converted about 20 new-car dealerships in the Denver area to a one-price, no-haggle strategy under the AutoNation brand.

The company plans to spread that idea to other markets this year and put all of its new-car stores under the AutoNation name.

AutoNation, which changed its name in April from Republic Industries Inc., owns the National Car Rental and Alamo Rent-A-Car chains, about 400 new-car franchises and 45 AutoNation used-car dealerships.

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