Quick action by Group 1 Automotive enabled it to show a slight annual increase in U.S. same-store used retail units sold in the third quarter despite turmoil in the used-car market, said outgoing CEO Earl Hesterberg on the third-quarter earnings call.

“One of the challenges we faced in the US in the quarter was a decline in industry used-vehicle price levels. This required quick action by our team to rapidly sell through our existing inventories so we could restock at latest market price levels,” he said. “This action enabled us to slightly increase sales in a market which declined double digits.”

On a same-store basis, Group 1 sold 31,518 retail used units in the third quarter of 2022, a 1.5% increase compared to the same quarter in 2021. Group 1 has 203 dealerships worldwide of which 144 are in the U.S. Due to acquisitions in the U.S. in the third quarter, a same-store comparison is the most meaningful in this case.

“Our ongoing used-vehicle stocking level of approximately 30 days supply enables us to react very quickly to market changes of this nature,” said Hesterberg.

Margins on used vehicles declined to “roughly $1,600” per unit in the third quarter from “roughly $1,900” in the second quarter, said Hesterberg.

On an annual basis, however, the profit decline was more drastic: Group 1’s gross profit per unit sold in the third quarter was $1,588, down 31.1% annually.

On a percentage basis, the gross margin for used-vehicle retail sales in the third quarter was 5%, compared to 8.1% for the same quarter in 2021.

The average sales price per used unit sold increased 11.6% annually to $31,754.

Group 1’s digital retail platform, AccelerRide allows consumers to sell their vehicle to Group 1 as well as purchase a new car or used vehicle.

It accounted for 10,300 vehicles acquired from individuals in the third quarter, said Daryl Kenningham, Group 1 president and COO. Kenningham will become CEO when Hesterberg steps down at the end of 2022.

“As a franchised dealer we also have a distinct advantage over used-only operators due to numerous organic sourcing channels available only to us including service drives, lease returns and OEM closed auctions,” said Kenningham.

In other results, Group 1 sold 31,745 new retail units in the third quarter, up 22.2% compared to the same quarter in 2021. The average price for a new retail unit rose 7.5% to $49,990.

As for the remainder of the year, “In the U.S., OEMs are optimistic about the fourth quarter with inventories up a little bit, especially in certain brands,” said Kenningham.