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Asbury Automotive Group Inc ABG

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GM Loses U.S. Sales Crown for the First Time Since 1931; We Expect Industry Growth in 2022

Analyst Note

| David Whiston, CFA, CPA, CFE |

Most automakers, except Ford who reports on Jan. 5, reported fourth-quarter or December U.S. auto sales on Jan. 4. According to Wards, December light vehicle sales fell year over year by 25.6% and by 22.9% after adjusting for one less selling day in December 2021. The seasonally adjusted annualized selling rate of 12.44 million was far below December 2020’s 16.31 million due to 2021’s chip shortage continuing to cause woefully inadequate inventory. Wards put full-year 2021 sales at 14.93 million, up 3.1% from 2020 but still far from 17.1 million in 2019. Barring no mass pandemic shutdowns in 2022, we expect that this year sees at least about 5% growth from 2021, but the chip shortage will likely not be completely resolved until 2023. We expect gradual improvement throughout 2022, especially in the second half. We believe industry demand remains high.

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Company Profile

Business Description

Asbury Automotive Group is a regional collection of automobile dealerships that went public in March 2002. The company operates over 150 stores with associated parts and service departments and 35 collision centers. About 80% of new-vehicle revenue is from luxury and import brands. Asbury also offers third-party financing and insurance products. Asbury operates in 15 states (mostly Texas, the West, and the Southeast) and entered Colorado in 2019. Asbury store brands include David McDavid and Park Place in Texas, Plaza in Missouri, Nalley and Crown in the Southeastern U.S., and the Larry H. Miller brand in the Western U.S. Asbury generated $7.1 billion of revenue in 2020 and is based in the Atlanta area.

2905 Premiere Parkway North West, Suite 300
Duluth, GA, 30097
T +1 770 418-8200
Sector Consumer Cyclical
Industry Auto & Truck Dealerships
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 7,900