Manheim's used-car buying for Sonic has been limited to the group's Cadillac store in Lone Tree and has not included EchoPark.
Dyke said it is too early to say whether the pilot will be expanded to include other Sonic stores. "We are in the early test phase of this, but it's interesting to think about," he said.
Sonic's four new-car franchises in the Denver area also include Toyota, Mercedes-Benz and BMW.
Dyke said he asked Manheim a year ago about becoming Sonic's used-car inventory contractor.
Behind the approach is a desire to eventually free Sonic store general managers from managing inventory -- a role that, Dyke said, eats up about 30 percent of their work time.
Dyke said that time would be better spent improving in-store operations, staff training and other activities aimed at boosting the consumer buying experience.
Under the pilot, Sonic tells Manheim what cars to buy for the Cadillac store using inventory-management software that Sonic has developed in-house. The desired price is provided to Manheim, Dyke said.
Then Manheim buys the vehicles using its own financing or inventory floorplan, Dyke said. Once the vehicles are in Manheim's possession, Manheim reconditions them, details them and delivers them to the Sonic store ready to be photographed for online listing and put on the lot.
When the pilot began, it took 21 days from a vehicle's purchase to its delivery at the dealership, Dyke said. That has been cut to 14 days. Dyke believes it could be cut to 10 days.
Dyke also envisions possibly sourcing all photography to HomeNet. Manheim and HomeNet are subsidiaries of Cox Automotive. Sonic employees today use HomeNet software and equipment to take the photos and send them to multiple Internet classified sites, he said.
Sonic knows how much profit Manheim is getting at each stage of the fulfillment process and pays when the vehicles are delivered, Dyke said.
He said he would be happy if Manheim made similar agreements with other dealership groups so it could improve efficiency, especially with reconditioning. Sonic trainers are helping Manheim speed reconditioning, he said.
Dale Pollak, a Cox Automotive executive and founder of vAuto, an inventory management software company that Cox Automotive bought in 2010, said Manheim is buying the used vehicles through its Manheim Denver auction site and reconditioning them there.
It is unusual for Manheim to both host an auction and be an active buyer at that auction. But Pollak said Manheim's arrangement with Sonic doesn't give the dealership group any advantage over other bidders in the auction lanes.
The auction company takes orders from Sonic on specific cars to buy under strict price parameters, he said. As such, it acts as any other agent would in buying vehicles for dealerships.