Singularly focused
Jackson’s arrival at AutoNation heralded a new era for the business in another way. In addition to sweeping away executives who wouldn’t or couldn’t adopt the new approach, Jackson eliminated those parts of the business that weren’t focused on selling cars.
AutoNation, once part of Huizenga’s Republic Services conglomerate, also owned Alamo Rent-A-Car and National Car Rental.
“The basic decision I made when I arrived was that AutoNation was going to be very good at one thing, and that’s automotive retail,” Jackson says. “We’re going to be the best in the world at it. Anything else is a distraction.”
Jackson’s moves were quick. Just three months after his arrival in November 1999, the company exited the vehicle rental business. The spin off of Alamo Rent-A-Car and National Car Rental into publicly-traded ANC Rental Corp. was completed by June of the following year.
By year’s end, Jackson had also exited the used vehicle megastore business, closing its AutoNation USA stores.
“Creating conglomerates is very difficult to do,” he says. “General Electric has done it. They took 100 years to do it, but I don’t have 100 years.
“I’m not sure with how the megastores were created in AutoNation, we could have ever had added value,” he says. “There were many things that were done from a consumer point of view that were extremely positive, but the economic model was flawed. And we needed to put that behind and put our capital and our energy where we could create value.”
Today, with its singular focus, AutoNation’s revenue stream is divided among new vehicle sales at 61 percent; used vehicles at 23 percent; parts and service at 13 percent; and finance and insurance at 3 percent.
“The one number we would like to increase steadily is our service and parts business,” Jackson says. “That’s the foundation of our business. We service 25,000 vehicles a day. They are complex, highly sophisticated, technical products. We have a lot of added value and a lot of infrastructure that we’ve built in order to care for those vehicles.
“It’s a high-margin business to do our high added value. That’s a business we would like to disproportionately grow.”
Based on Jackson’s record, there’s a good chance that 10 years from now, AutoNation will be running over its competitors in that segment of the industry as well.
HOW TO REACH: AutoNation, www.autonation.com or (954) 769-7000
