AutoNation Sees Revenues Rise as Tariff Situation ‘Evolves’

AutoNation saw quarterly revenues rise as it navigated evolving tariff policies and consumer purchasing trends.

While announcing a 7% uptick in revenues Thursday (Oct. 23), Mike Manley, the auto retailer’s CEO, said that the industry is gaining clarity on the lingering effects of trade disputes.

“The tariff story continues to evolve,” Manley told analysts during an earnings call. “Most of the negotiations with major trading partners are nearing completion and the effects on the auto industry I think are becoming clearer.”

These tariff-driven changes are expected to impact dealers and consumers through “de-contenting and reductions in trim levels, additional fees and moderation in incentives and marketing spend,” Manley said, adding that original equipment manufacturers (OEMs) are engaging in manufacturing relocations and other moves to bolster supply chain efficiency.

Meanwhile, consumer behavior showed a strong reliance on financing and a sharp shift toward alternative power sources. AutoNation reported a record quarter for customer financial services (CFS) gross profit, which increased 12% year-over-year.

Finance penetration was higher as well, with around three-quarters of units being financed. This financial strength was driven in part by high attachment rates for extended service contracts.

Manley underscored the importance of this performance, especially when it comes to product attachment.

“Our expectation is that their performance will continue. And I think the thing that [CFO Tom Szlosek] and I are delighted about is that it’s really in value added products,” he said.

Sales showed consumer reactions to the expiration of government incentives, with hybrid vehicle sales jumping 25% and battery electric vehicle (BEV) sales soaring more than 40% year-over-year.

While AutoNation was optimistic on the tariff situation, the levies continue to plague the corporate world, as PYMNTS wrote Thursday.

“Even before third-quarter 2025 earnings started rolling in, global businesses had warned of over $35 billion in costs from U.S. tariffs,” that report said. “That estimate is only rising as Q3 reporting hits the newsstands.”

For example, Tesla alone reported a $400 million loss for the most recent quarter due to tariff-related costs, while Toyota has forecast a $9.5 billion full-year impairment.

For other firms across various industries, worst-case scenarios have been revised downward, helped by bilateral relief deals (notably with the European Union and Japan) and tactical carve-outs of tariff application.

However, the S&P Global Ratings have recorded 55 tariff-driven ratings actions as of Oct. 17, with only one positive outlook revision, according to a statement shared with PYMNTS.

“It’s evidence that balance sheets are feeling the strain even as headline profits may appear to hold up,” PYMNTS added.

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