...AutoNation Inc.'s first-quarter sales and margin declines remain in line with our expectations. New car sales fell 2.4%, and used units were down 15%. The lower new vehicle sales seemed to be driven by somewhat weaker demand for new vehicles, as automakers have not increased incentives despite higher interest rates and have instead focused on increasing fleet sales. The reduction in used sales is a combination of both weaker used vehicle demand and significantly tight supply in vehicles three years old or less. With lower demand for vehicles, the unsustainably inflated prices charged at dealers are falling. AutoNation indicated only 45% of vehicles were sold at manufacturer's suggested retail price versus 60% when inventories were extremely tight last year. This normalization in new vehicle margins is consistent with our expectations. Consequently, we forecast EBITDA margins to fall to 6.5%-7% in fiscal 2023 and 6%-6.5% in 2024. Notably, these forecast margins are still higher than the...
