×

Automakers on pace for banner year: AutoNation CEO

Ford Focus cars are seen on the sales lot at AutoNation Ford Miami in North Miami, Florida.
Getty Images
Ford Focus cars are seen on the sales lot at AutoNation Ford Miami in North Miami, Florida.

Automakers will have an easy time beating January 2014's dismal numbers when they report monthly car sales on Monday, but industry watchers should not discount the sector's strength, AutoNation's chairman and CEO told CNBC on Tuesday.

"The comparison is easy, but the message is clear. The auto industry is off and running to break through 17 million unit sales this year, and I think you'll see strong reports from all the manufacturers today," Mike Jackson said in a "Squawk Box" interview.

Read More Global auto sales remain on uptrend: IHS

AutoNation, the country's largest auto retailer, reported its best quarter in nearly 10 years on Monday as sales increased 20 percent from the same quarter last year. Earnings per share came in at $1.02 on revenue of $5 billion. Analysts had expected EPS of 91 cents and revenue of $4.9 billion.

New vehicle sales increased 9 percent in 2014, while used car sales jumped 5 percent.

As for discounting in the holiday season, incentives and promotions offered during end-of-year sales were "very reasonable," Jackson said.

"I don't see anybody doing anything extreme that's not sustainable, and the fundamental drivers for the auto sales remain strong," he said.

Analysts are expecting the big manufacturers to report sales growth of 13 percent to 17 percent for January. January is typically the second-slowest sales month of the year.

Automakers' robust sales were helped by low gas prices in December.

Jackson said the price of gasoline at the time of purchase determines what type of car the consumer will buy. He noted that truck sales have gone from about 47 percent of the mix a 1½ years ago to more than 55 percent today.

Read MoreAmericans on verge of buying 1M expensive cars

"The trend absolutely continues," he said. "While the customers all say they value fuel economy, unless there's an economic underpinning for that—and that's driven by the price of gasoline—they're going to be more indulgent around the size of the vehicle that they buy and the speed of the vehicle that they buy."

In the last seven months, crude prices have fallen as much as 60 percent, sending the average price of gasoline in the United States to about $2 per gallon. Americans really need gas at $3.50 to really value fuel economy, Jackson said.

Morning Squawk: CNBC's before the bell news roundup

Sign up to get Morning Squawk each weekday

Get this delivered to your inbox, and more info about about our products and service. Privacy Policy.
Please enter a valid email address