Operator: And our next question comes from David Whiston from Morningstar. Please go ahead with your question.
David Whiston: Thanks. Good morning. Just a couple for me. On used, you guys continue to do pretty well there despite all the pressures in that space. Do you have any kind of national algorithm? Or is it just more of a data approach that’s a bit less centralized?
Daryl Kenningham: We’re getting more centralized, David. One, with the technology we use, and we switched technology about a year ago, 1.5 years ago maybe. And I think we’re leveraging it better today. We also have made some changes in some of our aging policies, some of our intracompany transfer policies to be able to put vehicles where they will have the highest velocity at the most opportunistic profit on a faster basis. And I think we’re seeing the results of all of that. And we’re able to keep our year-over-year growth rates up even though we have less inventory. We have 26 days of inventory, and we’re still able to keep the velocity and the year-over-year improvements in place and the PRU is holding up well. So I think it’s a variety of things that the team is doing. We’re approaching it more on a standardized basis than we ever have, and we have more resources on it today than we ever have to.
David Whiston: And in the U.S. market, are you seeing any kind of meaningful increase in leasing yet?
Daryl Kenningham: Actually, our leasing was down a tick in the quarter, but it’s up significantly from where it’s been in the last couple of years. So we’ve got the number in our deck, I think.
Daniel McHenry: We do. David, it’s Daniel here. New vehicle leasing year-on-year. So quarter 1, ’24 versus quarter 1, ’23, we saw 460-basis-point increase. So leasing today is up to 18.6% of our new vehicle sales.
Operator: Our next question comes from Rajat Gupta from JPMorgan. Please go ahead with your question.
Rajat Gupta: Great. Good morning. Thanks for taking the question. First one was on services. Pretty good growth in customer pay and warranty. But it looks like collision and wholesale parts were slow. I mean especially collision was weak. Any sense of what drove that reversion? One of your peers reported yesterday also, it was just quite weak in that category. But I was curious, like, how should we think about that part of the service business recovering, also the wholesale parts and just in the context of the overall service growth as well, how should we see things trending through the course of the year? And I have a follow-up.
Daryl Kenningham: A couple of comments, Rajat. On collision, I can’t assign a value to this. But what we do seem to be seeing are insurance companies totaling more vehicles because of the used car valuations that have been falling. And — so that is certainly impacting the collision business, which will, to some affect effect the wholesale parts business. Also, we’re trying to be smart about our wholesale parts business. That can be a lot of revenue and not a lot of margin. And so we’re kind of in the process right now of at least reviewing to make sure that we’re generating positive returns on that. So that could be affecting some of that revenue on the wholesale parts business. But we were pleased with the CP performance, as you mentioned, and we added more technicians year-over-year again, and that continues to be a focus for us.
Rajat Gupta: Got it. I mean should we expect this kind of like year-over-year growth rate to continue for the remainder of the year? Should we expect some kind of like improvement? Or is this a good level to assume for the remaining of the year on the overall parts and service segment.
Daryl Kenningham: I think we’re kind of comfortable with where we are today as trying to estimate where we would be in the future.
Operator: Our next question comes from Glenn Chin from Seaport Research Partners. Please go ahead with your question.
Glenn Chin: Good morning, folks. Just going back to the U.K. cost cuts. Can you share with us how much of a benefit was realized in the first quarter? And then can you remind us — I think you mentioned in the fourth quarter, you expected annualized savings of — was it $8 million to $10 million, if you can just confirm that?
Daniel McHenry: Glenn, I think that’s for our annualized savings of $8 million to $10 million. The cost cuts took place throughout the quarter. It takes a little longer in the U.K. to generate some of these savings just with the employment law that it’s there. But I would expect to see the full benefit of the cost cuts in quarter two.
Glenn Chin: But I’m trying to get to how much more incrementally we should expect. So how much was realized in first quarter, Daniel…
Daniel McHenry: I would say 50% of it was realized in the first quarter, if you assume that the redundancies took place 50% through the quarter effectively.
Glenn Chin: Okay. Very good. That’s helpful. Then just a question on full-size pickups. There’s some stories of rising inventory, some to triple-digit levels. You saw Ram cutting employees and production have you guys detected a change in the demand profile for full-size pickups?
Daryl Kenningham: I wouldn’t — I’ve seen some of that press too, Glenn, and when we kind of look across our mix, the GM brands were pretty good. The Ram was down a tick and F-Series was down a tick. Toyota was up significantly and actually — so we were — overall, we were up a little bit in large pickup sales year-over-year. So it’s hard for me to square that with what I’ve seen in some of the press.
Daniel McHenry: Glenn, one thing I’ll add to that is our Texas exposure makes a big difference for pickup sales.
Daryl Kenningham: And if you look at our truck day supply as compare to the car, it’s — they’re right together.
Operator: Our next question is a follow-up from Rajat Gupta from JPMorgan. Please proceed with your question.
