AutoNation to order more vehicles in 4Q; feds owe dealer chain $54M from clunkers program

AutoNation to order more cars as it waits for $54M

AutoNation Inc. said Wednesday it will increase vehicle orders in the fourth quarter as it seeks to restock showroom floors emptied out during the Cash for Clunkers program.

The Fort Lauderdale, Fla.-based auto retailer said it would boost orders 50 percent in the fourth quarter from the third quarter. The company also ordered more cars than expected in the third quarter.

“We had such a huge success with Cash for Clunkers that we are lean and need to increase orders of core products,” said CEO Mike Jackson.

Automakers sold a total of 1.3 million new cars and light trucks last month, with more than half of the sales coming under the government rebate program.

AutoNation, the nation’s largest dealership chain, said it sold 13,000 vehicles during the clunkers program which began in late July and extended into August. The company’s dealerships stopped selling cars under the program three days before it officially ended to ensure dealers were able to process the paperwork to receive per vehicle reimbursements of $3,500 or $4,500.

The government owes AutoNation more than $54 million from clunker sales, with Jackson adding that the company’s dealers have “received a very small portion” of the rebate cash owed so far.

“We expect to get paid in 30 to 60 days,” he said. “We’re confident we will get all our money.”

Auto sales are expected to fall in September, but the August lift will give the annualized selling rate a boost in an otherwise dismal year for sales.

Jackson, like several other automakers and analysts, estimate a seasonally adjusted annualized selling rate, or SAAR of 10 million to 10.5 million units for 2009.

“We think the worst is behind us,” Jackson said. “We expect a continual, gradual recovery in the fourth quarter and expect in 2010 the SAAR to be above 11 million units.”

Shares of AutoNation fell 18 cents to $17.84 in late afternoon trading.