When asked how many used-car stores are planned, Dyke said, "One hundred is the tip of the iceberg." Dyke made the comment during the group's third quarter conference call with analysts and journalists today.
"It's time for a new player," he added.
No. 1 by far
CarMax sold 408,080 used vehicles in its fiscal year that ended Feb. 29, 2012, making it far and away No. 1 on the Automotive News list of the top 100 dealership groups in the United States as ranked by used-vehicle sales. Sonic is No. 4, with used-vehicle sales of 105,615 in 2012.
In contrast, CarMax ranks No. 107 on the Automotive News list of the top 125 dealership groups in the United States as ranked by retail new-vehicle unit sales, with sales of 7,679 new units in its fiscal 2012.
Sonic is No. 3 on the new-vehicle sales list, with retail sales of 132,136 in 2012.
Dyke said the standalone used-car outlet concept has been on Sonic's radar as least since 2005. The company began working on it in earnest over the last five years or so, he said.
Sonic President Scott Smith said that the company's technological advances will help make a separate used-car operation possible.
For example, he cited the development of a centralized inventory management system. Internal and third-party sales data is analyzed to determine the optimal list price and best store location to sell used-vehicle acquisitions. That, in turn, helps store employees offer the best possible price to customers looking to sell their existing vehicles.
"We've been learning over the last five years to execute this model," Smith told Automotive News following the conference call. "It took us a lot of time to build and develop this technology and processes and to learn from it. If anybody wanted to go copy CarMax today, it would be very, very difficult.
"If anybody wanted to copy what we're rolling out, it would be very, very difficult and take a tremendous amount of time."
Separate managers, brand
The used-vehicle operation will have its own dedicated management team, a separate national brand and a national footprint, Dyke said. It will specialize in vehicles up to 10 years old with an average price range of $14,000 to $18,000.
Dyke would not give details about the used-car stores' size and inventory but said they will not copy the "big box" store concept for which CarMax is noted.
CarMax officials did not immediately return calls requesting comment.