ABG Reports Decrease in Revenue for the Third Quarter of 2023
Segments of revenue
ABG's consolidated revenue for the nine months ended September 30, 2023, was $10.99 billion, compared to $11.73 billion for the same period in 2022. The decrease in revenue was primarily driven by lower used vehicle and F&I revenues. Additionally, the effects of dealership divestitures impacted consolidated revenue.
ABG experienced an increase in customer pay revenue, warranty revenue, and wholesale parts revenue during the nine months ended September 30, 2023. This increase can be attributed to strong customer demand for pay and warranty services, as well as increased aging of vehicles. ABG's focus on improving the customer experience, providing competitive benefits to technicians, and upgrading equipment has contributed to the growth in customer pay parts and service revenue.
ABG faced challenges in the third quarter of 2023, with lower gross profit per vehicle sold for both new and used vehicles. This decline in gross profit margins is a result of the ongoing downward shift from historic highs in recent years. The company also experienced the impact of dealership divestitures on consolidated revenue and gross profit.
ABG completed sixteen divestitures in 2022, contributing $683 million in revenue for the year. Four divestitures closed in the first quarter, three in the second quarter, and nine in the fourth quarter of 2022. The company also sold one franchise (one dealership location) in Austin, Texas, during the nine months ended September 30, 2023.
ABG reported a decrease in revenue for the third quarter of 2023 compared to the same period in 2022. This decline was primarily driven by lower used vehicle and F&I revenues, as well as the impact of dealership divestitures. However, the company saw an increase in customer pay revenue, warranty revenue, and wholesale parts revenue, indicating strong demand in those segments. ABG continues to focus on improving the customer experience and increasing customer pay parts and service revenue over the long-term.