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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
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
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
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
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
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
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