The rated auto retailers have survived the operating and financial problems that accompanied the recession. In 2008 and 2009, revenues shrank as new-vehicle sales plunged and unemployment increased, consumers' vehicle preferences shifted quickly to smaller, lower-margin cars when gas prices rose, and most rated auto retailers' stock prices fell, resulting in goodwill write-downs that reduced liquidity. In some cases, ill-timed debt maturities and tight covenants caused unexpected liquidity risks. Nevertheless, Standard & Poor's Ratings Services' recent rating actions on the auto retailers have been stable to positive, reflecting our opinion that these companies have proven their abilities to rebound from the recession. Today, the economy remains fragile, and auto retailers are focused on their basic business of attracting customers into...
Companies mentioned in this report are:
- Penske Automotive Group Inc.
- Sonic Automotive Inc.
- Group 1 Automotive Inc.
- AutoNation Inc.
- Asbury Automotive Group Inc.
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Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues. SHOW LESS READ MORE >