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Sonic Automotive Inc. is planning to launch independent used-vehicle specialty stores in late 2014, taking on CarMax Inc., the largest used-vehicle retailer in the United States. The independent used-vehicle specialty stores will be separate from Sonic’s existing franchise dealerships. Jeff Dyke, executive vice president of operations at Sonic, remarked that the retailer is planning to break ground on the first specialty store in Denver, "less than 5 miles" from one of two CarMax stores in the market.
Dyke remarked during the Sonic’s third-quarter conference call that the retailer is planning around a hundred used-car stores, but the figure is only “the tip of the iceberg." He remarked that "it's time for a new player." CarMax is No. 1 on the Automotive News list of the top 100 dealership groups in the US -- based on used vehicle sales -- disposing 408,080 units in its fiscal year ended Feb. 29, 2012. Sonic is fourth on the list with used-vehicle sales of 105,615 in 2012.
On the other hand, CarMax is 107th on the Automotive News list of the top 125 dealership groups in the US – based on retail new-vehicle unit sales – selling 7,679 new units in its fiscal year ended Feb. 29, 2012. Sonic sold 132,136 vehicles in the period, good enough to be named third in the list. According to Dyke, Sonic has been considering the independent used-car store concept since 2005.Read the entire article Sonic plans to open stand-alone used-car stores in 2014, take on CarMax
CarMax Inc. has commenced a media agency review, people privy with the matter told Advertising Age. The move came months after the company named Cheil's McKinney as its new creative agency and less than a year since Jim Lyski joined as chief marketing. It is of note that Lyski was the former CMO at Scotts Miracle-Gro, another media agency account also in review and under new marketing leadership.
CarMax chief executive Tom Folliard said in August 2014 that Lyski’s extensive marketing experience and strategic understanding of today's consumer could prove to be a tremendous asset to the company, which he said is in the midst of a national expansion plan.
The company is set to issue an RFP in the next few weeks and commence presentations in February. CarMax posted a 4-percent surge in net earnings to $454 million and 13 percent in total revenue to $10.7 billion in the first nine months of its fiscal year.Read the entire article CarMax starts media agency review
The corporate sponsors of the Los Angeles Clippers basketball team – like Kia Motors America, Mercedes-Benz and CarMax -- may soon come back after the National Basketball Association banned owner Donald Sterling for life. Sterling was recorded as making racist remarks, for which he was also fined $2.5 million.
His remarks sparked nationwide outrage from people both inside and outside of the NBA. The remarks as well as remonstrations have led a number of companies and firms to cancel or suspend their sponsorships of the Clippers. NBA Commissioner Adam Silver said he will commence the process of compelling Sterling to sell the Clippers.
Kia Motors America, which is also the official automotive partner of the NBA, said that it appreciates and endorses Commissioner Silver’s “decisive action.” The carmaker has said that while its corporate sponsorship of the Clippers has been suspended, its relationship with franchise player Blake Griffin would continue.Read the entire article Lifetime ban on LA Clippers owner could entice sponsors to return
The alleged racist remarks by Donald Sterling, owner of the Los Angeles Clippers of the National Basketball Association, have led several corporate backers – like Kia Motors America, Mercedes-Benz dealers and CarMax -- to drop their sponsorship of the team. CarMax was the first sponsor to abandon the Clippers.
The used-car retail giant told ESPN that it finds Sterling’s alleged statements about black players and celebrities to be "completely unacceptable." CarMax has been sponsoring the LA Clippers for nine seasons. Following CarMax’s lead is Kia Motors America, which said it was suspending its sponsorship of the Clippers over the "offensive and reprehensible" comments allegedly made by its billionaire owner.
Kia also serves as the official automotive partner of the NBA and sponsors TNT's "Inside the NBA." Kia spokesman Scott McKee said in a statement that as fans of the game of basketball, the carmaker’s support of the players and the sport “is unwavering." Mercedes-Benz’s dealers in Southern California dealers are also abandoning the Clippers.Read the entire article Kia, Mercedes-Benz and CarMax drop LA Clippers backing after owner’s racist remarks
CarMax Inc. opened two used-car stores in Rochester, N.Y., and Dothan, Ala., in March after opening 13 outlets in the fiscal year ended Feb. 28, according to chief executive Tom Folliard during a conference call. That means the retailer now has 133 stores, with plans open 28 to 43 more by the end of February 2017.
CarMax posted an 18-percent rise in sales in the previous fiscal year to 526,929. "We're in full swing now," Folliard said. He remarked that its store in Dothan is CarMax's third small-format store. Measuring on 4,400 square feet, the Dothan store occupies around 3.7 acres and stocks about 120 used cars and trucks.
In 2013, a CarMax spokeswoman told Automotive News that a small-format store is around 7,000 square feet, stocking around 150 used cars and trucks.Read the entire article CarMax now has 133 stores, plans up to 43 more until February 2017
Sonic Automotive Inc. posted an 8-percent decline in net income in the fourth quarter of 2013 to $28.1 million, this despite posted surges in revenues and gross profits in all business fronts in the period. When adjusted for charges related to the impairment of property, equipment and franchise assets, Sonic's net income for the fourth quarter was $34.1 million, up 12 percent from the same period in 2012.
The company recorded a 6-percent rise in revenues for the quarter to $2.32 billion. In a statement, Sonic executives called 2013 a transition year for the company, saying they were pleased with the performance given all the changes at their stores as it gets ready for a new customer experience initiative launching this summer.
"2014 is going to be another challenging year for our team with all of the changes we plan," Jeff Dyke, Sonic's executive vice president of operations, said in a statement. "But, if history is any indication, our team will succeed in executing these initiatives, and I can't wait to see them go to work. It's going to be fun."Read the entire article Sonic Automotive fourth-quarter income drops to $28.1 million
CarMax Inc. posted a 12-percent surge in net profit in the third quarter ending Nov. 30, 2013 to $106.5 million, thanks to increased used-car sales and higher income at its captive finance unit. The company also logged a 13-percent rise in revenues to $2.94 billion in the same period. The company’s captive finance unit, CarMax Auto Finance, also recorded higher net income in the third quarter ending Nov. 30, 2013, to $83.9 million, from $72.5 million in the same period in 2012.
“The earnings growth was driven by double digit increases in total used unit and CAF income,” CarMax chief executive Tom Folliard said in a statement. The company’s used-vehicle unit sales surged to 122,065 in the period this year from 105,815 in the same period in 2012, attributing the higher unit sales to “improved execution in our stores and an attractive consumer credit environment, as well as a modest increase in store traffic.”
CarMax logged a 4-percent rise in wholesale vehicle unit sales third quarter ending Nov. 30, 2013, to 82,743, compared with 79,747 in the same period in 2012. The company said that this reflects the growth in store base. “Other sales and revenues” dropped 5-percent year-over-year with its extended service plan revenues increasing very slightly to $48.8 million from $48.6 million.Read the entire article CarMax logs 12% rise in Q3 net profit to $106.5 million
Sonic Automotive Inc. posted a third-quarter operating profit that remains essentially unchanged year-on-year at $57.8 million, despite a 5-percent surge in revenues to $2.24 billion. The company did not yet publish its third-quarter net income in the report, saying that it was waiting to calculate a newly identified tax gain, related to the extinguishment of certain convertible notes.
Sonic – the third-largest dealership group in the United States -- posted a 68-percent drop in net income in the second quarter of 2013, no thanks to charges associated with retiring debt along with some issues in rolling out True Price.
The program – which sets vehicle prices within $300 of the lowest acceptable transaction price -- was rolled out to all Sonic dealerships in the first quarter of 2013. Sonic said that around 15 percent of its 105 stores were still struggling with the True Price model in the third quarter, compared to around a third in the second quarter.Read the entire article Sonic has $57.8 million operating profit in third quarter 2013
CarMax Inc. posted a 26-percent surge in net profits to $140.3 million and an 18-percent jump in revenues to $3.25 billion in the fiscal quarter ended Aug. 31, 2013. CarMax has also disclosed the locations of five planned used-car dealerships, bringing to 17 the total number of stores the retailer plans to open by Aug. 31, 2014.
According chief executive Tom Folliard, CarMax has not changed its plans to open 30 to 45 used-car dealerships over the 36 months that started March 1, 2013. He remarked that the 17 new stores over the next 12 months is just a refinement of the timing and the company has not changed its projections. CarMax sold 21 percent more used cars and trucks in the fiscal quarter ended Aug. 31, 2013 to 134,854 units, with sales at stores open for at least one year surged 16 percent.
According to Folliard, CarMax's sales mix has been consistent over the past few years, with vehicles five years and older accounting for around 25 percent while trucks and SUVs make up 25 percent. Sales of compact and mid-sized cars accounted for nearly 40 percent.Read the entire article CarMax logged 26% rise in net profits in quarter ended Aug. 31
Starting 2014, Sonic Automotive Inc.’s stores across the United States will carry the Sonic name. The branding move will go along Sonic's introduction of a new sales approach in which staffers will use iPads to handle vehicle transactions from start to finish – a method linked to the company’s True Price strategy that limits price negotiations.
Sonic launched True Price to stores early this year but the strategy met some issues. Sonic intends to introduce the iPad process starting July 2014, with the Sonic rebranding to roll out at the same time, according to Jeff Dyke, executive vice president of operations at the dealership group.
Dyke remarked to Automotive News that although “putting the name up on the building is important,” the most important thing to differentiate themselves with the process. Dyke disclosed that Sonic, which is the third-largest dealership group in the US, is investing hundreds of millions of dollars over several years to implement the changes in its customer service approach.Read the entire article Sonic Automotive will rename stores with Sonic tag in 2014
CarMax Inc. posted a significant increase in profit for the third quarter ended Nov. 30, 2012, logging $94.7 million in net income, or 41 cents per share, for the period. The largest used-car retailer in the United States logged $82.1 million in net earnings, or 36 cents per share, in the third fiscal quarter of 2011. CarMax attributed its strong third-quarter profit to a rise in supply, more attractive financing options and improved customer sentiment.
According to the retailer, used-car supplies have improved, following a shortage in the previous quarters, as customers disposed their old cars to acquire more recent used models and new ones.
In a conference call, CarMax chief executive Thomas Folliard said that consumer sentiment has improved, which may be resulting in more engaged customers in their stores. CarMax Chief Financial Officer Thomas Reedy remarked that customers have become more responsive to low interest rates, resulting to higher sales and fewer "payoffs," in which customers sell their vehicles to CarMax but do not purchase a replacement.Read the entire article CarMax posted $94.7 million in net income for third fiscal quarter
Sonic Automotive Inc. attributed its lower average new-vehicle gross profits in the third quarter of 2012 to lower supplies of BMW vehicles. Sonic, however, said that inventory levels are returning to normal. Jeff Dyke, Sonic executive vice president of operations for the third-largest retailer in the Unites States, said that its BMW dealerships in the South were short of vehicles since early 2012 as a result of the German carmaker’s regional allocation system.
He noted that supplies were almost non-existent by the end of July. Sonic's BMW supplies were 34 days in total at that time, but were in the 20s at the Southern stores. Dyke disclosed that there were months that he had no BMW 3 series on his inventory. This came as Sonic Sonic posted an 11-percent drop in net income for the third quarter of 2012. Sonic's adjusted income from continuing operations hiked 15% on record new-vehicle volume of 35,062 units.
With 15 stores, BMW accounts for 17% of Sonic's volume but up to 30% of its new-car gross profit, according to Dyke. He told Automotive News that if one’s business is “dropping off that much,” it is hard to make up with any brand. For the third quarter of 2012, Sonic posted average new-car gross profit of $1,987 per vehicle across all brands, which is $442 less than the figure a year ago.Read the entire article Sonic posts lower average new-car gross profits in 3rd quarter due to low supplies of BMWs
CarMax Inc. reported a drop in profits during the fiscal first quarter, demonstrating a decrease in the demand for new vehicles. The net income of the largest retailer of used cars in the U.S. for the first-quarter ended May 31, decreased to $120.7 million, or 52 cents per share. In comparison, its net income one year ago was $125.5 million, or 54 cents per share.
Its revenue rose 3% to $2.77 billion. Its gross margin fell from 14.3% a year ago to 13.8% this year. In this same quarter, new-vehicle sales dropped by 13% to 2,107 units. CarMax operates new-vehicle franchises with Nissan, Toyota, Chrysler and General Motors. In the first quarter, its total used unit sales increased by 3%.
The retailer said that its current operations include 112 used car superstores spread out in 56 markets. CarMax said that the total customer traffic and conversion at comparable stores were about the same as the first quarter of the previous year. CEO Tom Folliard released a statement to say that even if the comparable store used unit sales were flat, CarMax had strong used and wholesale gross profit per unit and higher CarMax Auto Finance income due to its solid execution.Read the entire article CarMax reported a drop in profits during the fiscal first quarter
Service advisers at 34 Sonic Automotive Inc. stores are utilizing iPads as part of operations and have notice the increase in repair orders. At these stores where service iPads are used, customer-pay business is increasing. For one, grosses per repair order have increased by 8% on average at Lexus dealerships and 11% percent at Toyota stores. Last October, Apple, iPad's manufacturer, even recognized the accomplishments of Sonic during the gadget maker's earning conference call. In April, all Sonic stores will be equipped with service department iPads. Also, sales representatives have already received iPads. Sonic President Scott Smith disclosed that they have made a "huge, huge, huge, multiple-tens-of-millions-of-dollars commitment to go this way," adding that this is just going to get bigger.
He disclosed that they are rolling out the iPads and iPhones to technicians, service writers, salespeople, F&I and porters. "It's not cheap," he admitted. Sonic, the third biggest retailer in the nation, is investing $57 million this year on technology. It is spending much to equip its frontline employees with Apple gadgets that are expected to boost their productivity, persuade clients to spend more and increase loyalty. Unlike other large public dealership groups, Sonic is staying away from acquisitions and instead, it is investing internally.
Other huge retailers are also utilizing tablets in their operations, but Sonic's initiative is on the leading edge. Leaders at AutoNation have disclosed that they will be equipping their service and sales employees with tablet computers in 2012 and 2013. Asbury chief Craig Monaghan foresees a day when most areas of the dealership are using tablets instead of PCs. Asbury has utilized iPads in some store pilots. Group 1 Automotive is utilizing tablets in service departments at some stores. Lithia and Penske are operating service department pilots.Read the entire article Sonic credits iPad use for raising productivity of sales, service employees
The dismissal of Ernst Lieb last fall as the Mercedes-Benz USA chief has cleared the way for the settlement of a legal dispute between the automaker and Sonic Automotive Inc. with regard to dealership design standards. Sonic President Scott Smith said in an interview with Automotive News last week that his company is now happy to do Autohaus renovations for its seven Mercedes shops.
He also related that the departure of Lieb was key to the resolution of the legal battle. Mercedes and Sonic, which is the third biggest automotive retailer in the U.S., jointly publicized on February 24 that they had entered into a settlement over the dispute surrounding Sonic's 2008 lawsuit against the automaker.
Smith commented that they had "a very good relationship" with the automaker prior to its former leadership. He does not believe that they would have been able to reach a settlement with the former leadership. On the contrary, Smith shared that the new leadership is "fantastic." He added that they were "thrilled" to have this matter behind them. Additionally, Smith said that they are looking forward to growing with the automaker.Read the entire article Ernst Lieb’s exit paves way for settlement of Mercedes-Sonic legal dispute
The profits of Sonic Automotive Inc. in the fourth quarter had increased as the demand for the new and used vehicles did better than the industry. When adjusted for one-time gains and losses, the net income of the No. 3 auto dealer group in the U.S. was $25.9 million compared with $16.5 million for the same quarterly period last year.
Its revenue increased by 12% from last year to $2.07 billion, slightly higher than the $2.06 billion that analysts had forecasted. The company said that its new-vehicle retail sales revenue rose by16% in the quarter to $1.1 billion. In a statement, Jeff Dyke, Sonic's executive vice president of operations, said that its new and used volume growth still surpasses industry averages as its team uses its “operating playbook strategy.”
He added that the team is focused on used car processes and this has led to double-digit volume growth for the past 11 straight quarters. Sonic then posted a 15% compound annual growth rate over the past 4 years. When one-time items are excluded, Sonic posted earnings of 43 cents a share, exceeding what analysts polled by Thomson Reuters I/B/E/S had predicted by five cents.Read the entire article Sonic Automotive posted a $25.9 million net income in fourth quarter of 2011
CarMax Inc. aims to expand and to open up to 55 used-car stores through February 2016, a 50-percent climb in store count. Based in Richmond, Va., Carmax announced that its net earnings and revenues increased in the quarter that ended Nov. 31, 2011.
The used-car retailer said that there was a slight dip in the unit sales of used cars and trucks in the quarter. The most affected stores are those that had been open for at least one year. According to CarMax Chief Executive Officer Tom Folliard, the company aims to open 10 CarMax stores in its fiscal year that starts March 1, 2012.
In particular, it hopes to open 10 to 15 new stores in each of the three coming fiscal years. CarMax currently runs 107 used-car stores in 50 markets. Folliard told analysts on a conference call made recently that if the situation doesn’t get worse, it will persist in managing its business the same manner that it has when it comes to efficiencies and margins. This would be its growth plan.Read the entire article CarMax aims to expand and to open up to 55 used-car stores
The United States' largest used-car retailer - CarMax Inc. – has two 30-second ad spots for the Super Bowl in February 2011. One ad will run in the second quarter while the other will be seen in the third quarter.
Vice president in charge of creative marketing and advertising, Laura Donahue, was mum on what these spots will be; however, she did say furry creatures won't have quite the starring role they had in the past and she did guarantee the work would be funny, but in a "sophisticated" way. CarMax's previous regional ads for the game have starred animals like prairie dogs and monkeys.
The creative work is being done by CarMax's new agency, Amalgamated, of New York and the force behind the ads is Eric Silver, who became chief creative officer and majority owner of Amalgamated in September 2010. Donahue also talked about the ads with Advertising Age, a sister publication to Automotive News.Read the entire article CarMax will make its first national splash in the Super Bowl in February
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