Sonic reports progress toward 45-minute transaction goal
Revenue for Q4, 2014 up
Sonic Automotive said today its new One Sonic-One Experience program to speed up transactions is making progress toward hitting its goal of cutting closing times to 45 minutes on average.
The dealership group said it has been rolling out the program at stores in Charlotte, N.C., and is closing some transactions in as few as 40-50 minutes, Peter D’Angelo, vice president of new-vehicle sales, told Automotive News today.
Town & Country Toyota kicked off its soft launch of the One Sonic-One Experience in August. The other Charlotte stores that launched in December and January are running slightly more slowly, but still close deals in less than an hour, D’Angelo, said.
One Sonic-One Experience is the Sonic’s guarantee to complete a vehicle purchase in 45 minutes or less with one-price selling and a salesperson who will work with the customer on an iPad. The tool will be more sustainable to use across the enterprise early this summer, Jeff Dyke, executive vice president of operations, said in a conference call.
The program aims to create more of a specialty retail experience. It’s “much like that of an Apple Store or Starbucks,” Scott Smith, Sonic president, said during the call.
The company is smoothing out and speeding up the overall buying process with technology-driven one-price selling and simplifying used-car purchases.
The company also has launched EchoPark, Sonic’s used-vehicle business. Sonic started by opening two neighborhood stores and a hub in the Denver area in 2014. EchoPark will feature a large hub store in each market with smaller neighborhood stores nearby.
The hubs will have about 300 vehicles in stock, Automotive News reported in August. The neighborhood stores will typically have fewer than 40 vehicles. Sonic aims to have the stand-alone stores in more than 50 markets across the country.
Launches in the Denver area “other than [delays from] a few wintery storms in the area, have been a big success,” Dyke said.
Sonic last year also purchased four dealerships: Jaguar, Nissan, Chevrolet and Land Rover and received new Mercedes-Benz and Audi franchises.
The nation’s fourth-largest dealership group reported increases in revenue for both the fourth quarter and full-year 2014. Net income for the quarter dipped $2 million, but net income for the year surged $15.6 million, the company said today.
Fourth quarter revenue was $2.4 billion, up 2 percent from a year earlier. But net income for the quarter fell to $26.1 million, a 7 percent decrease. Earnings per diluted share were 50 cents, compared to 53 cents in the fourth quarter of 2013.
Adjusted net income from continuing operations for the fourth quarter was $32.5 million, or 63 cents per diluted share. Adjusted amounts include pretax expenses of $7.1 million, or 8 cents per diluted share, related to the EchoPark and $3.8 million, or 5 cents per diluted share, related to One Sonic-One Experience, Sonic said in a statement.
Sonic also said new retail sales reached 34,755 units for the quarter, a 1.8 percent increase from the fourth quarter of 2013. Fleet unit sales fell to 352 units, from 1,250. Used unit sales remained relatively flat at 26,406 units for the quarter.
Revenue for the year hit $9.2 billion, up 4 percent from 2013, with net income for the year surging 16 percent to $97.2 million. Earnings per diluted share were $1.84, compared to $1.53 in 2013.
Sonic’s new retail sales for 2014 increased 3 percent to 135,932 units, compared with 132,363 a year earlier. Fleet units decreased 58 percent to 2,485, compared to 5,911 a year earlier. Used units remained almost unchanged at 138,417 units.
Dyke said in the statement: "I could not be more pleased with our team's performance in the fourth quarter and for the year. We started 2014 with a huge calendar including launching both EchoPark and One Sonic-One Experience all in the fourth quarter of 2014. … I want to personally thank everyone for the hard work and dedication it took to successfully bring both projects to life."
"Despite the time and energy dedicated to the EchoPark and One Sonic-One Experience initiatives, our operations team was able to turn in a record breaking quarter and year.”
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