AutoNation Inc., perhaps the United States’ largest automotive retailer, just announced a third quarter $65 million profit due to reduced expenses and the help of Cash for Clunkers sales. During the summer, AutoNation’s 245 new-vehicle franchises in 15 states sold 13,000 new cars as a result of the Clunkers program.  

CEO Mike Jackson said the program signalled to consumers that it was safe to begin to buy again, telling the Associated Press that CforC boosted the company’s bottom line by 7 cents per share.  “It was like a government seal of approval, like it’s safe to come into the marketplace and buy a vehicle, that we’re over the abyss we were staring into for six months or nine months where everybody was scared to death whether Armageddon was finally here,” Jackson told the AP.

AutoNation’s domestic segment Q309 income was $34 million, up from $25 million this time last year, though new car sales still declined 11 percent. Premium luxury cars actually increased slightly year over year, from $43 million to $44 million. Expenses for the auto retailer were down 10 percent from Q308.  

 “We expect that the automotive retail market will remain challenging throughout the remainder of 2009 with a gradual recovery beginning in 2010,” Jackson said in the earnings announcement. “We are optimistic for the long term prospects of the auto industry based on the successful restructuring of the domestic auto industry, the move to a demand pull system, and the rationalization of the dealer network. As the U.S. economy, consumer confidence and credit markets improve, we expect to be well-positioned to capitalize on these trends.”

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