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Key takeaways from the call include:
Asbury executives also discussed future growth and market trends, highlighting the potential return of leasing and the adoption of electric vehicles as beneficial factors. They expressed optimism about deepening client relationships and expanding service retention, but acknowledged potential challenges due to economic and global uncertainties. The company also addressed its leverage, prioritizing cash flow for debt reduction.
The impact of the recent parts plant strike was also discussed, with potential shortages and disruptions expected. The company mentioned a slight decrease in product sales penetration, but they don’t consider it significant. They believe that a healthy balance is 70% product sales and 30% reserve.
The company generally prefers using manufacturer parts for post-warranty work but sometimes uses aftermarket parts to keep cars running. They expect the market average GPU to be higher than 2019 levels due to their brand mix. The call concluded with the announcement of discussing fourth-quarter earnings in the future.
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