Average gross profit per unit slowed in the second quarter of 2026, landing between $200 and $600 for many of the largest dealers, according to an analysis compiled by Stephens, Inc.
Driving the news: The Automotive Retailing Industry rankings by Stephens looked into the Q2 performance of Asbury Automotive Group, AutoNation, Group 1 Automotive, Lithia Motors, Penske Automotive Group and Sonic Automotive over the second quarter, representing 1,875 stores.
Lithia Motors, with its 467 stores, finished the quarter with $9.8 billion in revenue, $1.2 billion more than Penske’s $8.5 billion at its 362 dealerships.
Lithia retailed 104,089 new vehicles and 106,114 used units.
Also of note, AutoNation retailed 63,240 new vehicles and 64,521 used vehicles at its 269 stores.
Changing market: All eight top dealer groups saw a decline in the gross per unit year over year.
Lithia’s gross for new units fell $288, coming in at $2,728.
Group 1’s UK segment of 106 stores saw a decline of $20, as opposed to the $404 drop reported for its 145 dealerships in the U.S. segment.
Penske had the largest decrease of $527, but had the best gross overall at $4,374 per unit.
“Last year, everyone benefited from the surge in demand with the tariffs,” said Stephens analyst Jeff Lick. “You’re comparing against unique certain circumstances.”
Used grosses hold up: With the increased demand on the used market, the average gross per used unit improved for Asbury and Lithia in the second quarter.
Asbury saw an increase of $281, and Lithia saw an increase of $107.
Penske and Sonic were the only groups to see gross profits fall more than $100 on used vehicles.
What they’re saying: Lick pointed out that strong June sales boosted the performance for the largest groups to close out the quarter.
“Q2 was a lot better than Q1, and the economy is holding up,” Lick said. “After the tax refunds were expended, there was a worry sales would fall off a cliff. But June was a good sales month.”
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Bottom line: The used market is providing strength to the overall industry, as pointed out by the performance of the largest dealerships.
But Lick notes that new vehicle sales will need to increase to help fuel the used-vehicle inventory helping dealerships compete with other players in the market.
“Fewer new sales mean there are fewer used vehicles to sell. Everyone is buying off the street because there’s such a demand,” Lick noted. “It’s harder for dealers to compete [in that market]. They really rely on trade-ins.”
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