Auto retailer Group 1 Automotive Inc. reported a surge in income in the first quarter on rising new-vehicle sales and lower costs, but cautioned that shortages of vehicles from Japanese auto makers could crimp sales this summer.
The Houston-based company said income nearly doubled, to $15.4 million, or 66 cents a share, from $8 million, or 34 cents a share, a year ago. Revenue increased 18 percent to $1.4 billion as sales of new cars and light trucks climbed 20 percent to 24,704 vehicles, reported The Wall Street Journal.
"These results demonstrate our continuing focus on growing top-line revenues in all business segments while leveraging our improved cost structure," Earl J. Hesterberg, Group 1's president and chief executive, said in a statement.
Potential shortages of vehicles made by Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. loom at as a potential problem in the months ahead, since their models account for half of all the new vehicles Group 1 sells.
Mr. Hesterberg said the production cuts by the Japanese manufacturers stemming from last month's earthquake will have "some near-term impact to new car deliveries and sales in the coming months."
He added that if new-vehicle deliveries fall to between 30 percent and 50 percent of normal levels in the summer, "it is likely that inventory levels will constrain sales for the second quarter and possibly third quarter."
Fortunately, Mr. Hesterberg said, "we know how to manage the business in a low-inventory environment."
Group 1 owns and operates 103 dealerships and 27 collision repair centers in the U.S. and Britain.