Standard & Poor’s has downgraded AutoNation, the largest dealership group in the country, to one step above a junk rating in response to a weakened auto sales market and United States economy as a whole. S&P doesn’t expect the new car buying market to rebound until at least well into 2009.
Putting the Florida-based AutoNation on “credit watch” means that S&P officials will meet with AutoNation in the next 90 days to discuss the company’s future plans. It gives S&P a 50-50 chance to downgrade the dealership group again.
This is the third time in two years that AutoNation has been downgraded by S&P. The company’s cash flow is expected to be especially weak this year as it sits on massive amounts of unsold inventory nation-wide.
