DULUTH, Ga. — Asbury Automotive’s fourth-quarter performance capped off a solid year, with the group’s F&I and reconditioning operations delivering during a period in which the nation’s eighth largest auto retailer chose volume over margin.

The $60 increase in same-store F&I profit per vehicle retailed, which averaged $1,512 per copy, more than offset the $51 decrease in total front-end PVR ($3,253). Driving the group’s F&I operations, which increased total same-store F&I gross profit by 8% to $66.9 million, were the 1.5% and 6.9% increases in new and used-vehicle sales, respectively.

“The first half of the year we were pretty focused on our margin and not as much focused on volume,” said David Hult, the group’s executive vice president and COO, during the company's Feb. 7 earnings call. “As we started thinking about it during the year and looking at the total package between our F&I and our reconditioning gross, it just made sense to us looking at the business to really push the volume a little bit more to sacrifice margin.

“We’re happy with the outcome,” Hult added. “We’re going to stay with the current model that we have and hope for the same success going forward.”

The group sold 25,163 new units and 19,084 used units in the fourth quarter, with new- and used-vehicle same-store revenues rising 3% and 6% from a year ago to $913.9 million and $452.4 million, respectively. New and used margins were down 50 and 40 basis points from a year ago, respectively.

According to Hult, a combination of lower manufacturing incentives, particularly on the domestic side, and aggressive sales objectives drove down new-vehicle margins, which settled in at 5% for new and 7.1% for used.

“Turning to used vehicles, we increased our unit sales 7% in the quarter. However, our used-vehicle retail gross profit was up only 1%,” Hult said. “This was due to a combination of margin pressure and our decision to trade margin for volume.”

The group posted total same-store revenue of $1.62 billion in the fourth quarter. That’s up 5% from a year ago. Total gross profit also rose 5% from a year ago to $458 million. Gross profit for the group’s new-vehicle operations was down 5% from a year ago to $46.1 million, while used-vehicle gross profit totaled $28.7 million.

Parts and service revenue increased 8% from a year ago to $187.8 million, while gross profit increased 9% to $118 million. The groups reconditioning business accounted for $29.3 million of that total, a 9% increase from a year ago.

Net income for the fourth quarter totaled $67.1 million, or $3.08 per diluted share. That’s up from $41.1 million in the prior-year quarter. The group also reported adjusted income from continuing operation of $34 million, or $1.56 per diluted share. That’s up from $32.8 million in the prior-year quarter.

For the year, the group sold more than 180,000 vehicles, and posted more than $6.5 million in revenues. The group’s F&I operations average $1,446 in F&I revenue per retail unit for the year, up $38 from 2015 and up $335 from 2011. And according to officials, F&I product sales accounted for 65% of that 2016 average.

“On the F&I side, we’re very happy with where we came out. We think we can sustain these levels going forward,” Hult said. “I guess $1,600 is always a potential, but I struggle to see us getting there in the near future. I think where we’re at currently is probably the level we’ll stay at for a period of time, with small lifts here and there. But to us, [a $60 increase during the period] is pretty substantial.”