AP Eagers Ltd (ASX: APE) has seen its share price jump 3.0% to $11.18 after a trading update today.

The automotive dealer group is purely involved in retailing new and used cars to customers as well as servicing, parts and facilitating automotive finance.

In 2015, AP Eagers generated over $3.2 billion in revenues and reported a net profit after tax of $86.2 million. (That represented a 13.6% increase in revenues and a 13.1% increase in net profit).

It was also the fifth record year in a row

Today the company announced that the first four months trading in 2016 is once again in record territory, and the company was sitting 9% up in both revenues and profit year on year.

Acquisitions continue to play a part in driving revenues and growth, and this year will be no expection. AP Eagers finalised the acquisition of the Birrell Motors Group on April 1, and announced the purchase of Crampton Automotive Group in January 2016 – expected to be completed at the end of June 2016.

Automotive retail in Australia is still a highly fragmented market. AP Eagers sold nearly 45,000 new cars in 2014, but that represents just 4% of the national market, with more than 1 million cars now sold in Australia each year.

AP Eagers also appears to want to emulate CarMax in the US. CarMax is the biggest seller of used cars, and backs that up with transparent prices, 77% of cars are less than 4 years old and all cars are inspected and reconditioned so buyers can be sure they aren’t buying a lemon. Despite a market cap of US$10 billion, CarMax only holds a 2% market share.

One disadvantage CarMax has compared to AP Eagers is that it only sells used cars, and falling new car prices can impact on used cars. AP Eagers doesn’t have that problem.

AP Eagers also holds 19.9% of rival Automotive Holdings Group Ltd (ASX: AHG) – currently valued at $235.7 million, and owns a substantial property portfolio worth around $250 million.

Foolish takeaway

The future appears bright for AP Eagers, despite technology disruptors arriving into the market, and some cars sold entirely online (Tesla) rather than through a dealership.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.