The new Sonic Automotive Inc. car dealership chain has introduced a much more ambitious gaming plan for its EchoPark logo of independent used car dealerships.
“EchoPark continues to exceed our expectations,” CEO David Smith said in a call to the convention to announce the quarterly effects on July 30.
Smith said Sonic now plans to open “more than 140 EchoPark locations nationwide by 2025, up from 10 today, and much more than the five-year plan of at least 25 announced in the past.”
The move is a component of a trend in which some of the country’s largest retail car teams are creating networks of branded used car retail stores across the country. It’s for a number of reasons.
First, used cars generate profit margins higher than new ones. Second, even before the coronavirus, sales of new vehicles are expected to decline cyclically.
In addition, higher costs for new cars are leading many buyers to buy used cars, even if they can only buy new cars. In addition, high unemployment due to the pandemic has accelerated the trend towards used cars. Finally, in the short term, new cars are rare, also due to the pandemic.
The EchoPark concept has evolved since its launch through Sonic in 2014. The newest thing is that Sonic adopts a slightly more complete EchoPark regional “centres” design. In turn, the centres will have satellite “delivery and purchase” centres.
In undeniable grocery delivery and shopping centers, consumers can receive a car or truck they purchased online. If they have an exchange, they can also sell it downtown. Customers can also sell a used car without buying a car from EchoPark, the company said.
EchoPark’s nerve centers also buy and sell cars, and also repackage used cars that can be purchased or purchased commercially at auction. Refurbished cars are sold in the EchoPark network, or potentially at Sonic’s new vehicle dealerships, Sonic said.
The value is negotiable in EchoPark locations. EchoPark sites also offer service or parts. EchoPark locations can direct service consumers to Sonic Automotive’s new full-service franchised car dealerships, if there’s one nearby, Smith said.
Previously, Sonic planned to build larger EchoPark locations on new sites, providing many more additional services, such as loose deliveries to the customer’s location, loose “chic” coffee and other consumer benefits that have been added to many costs, Smith said in a phone interview after the convention call.
“We said yes to everything, ” he said. “But the expenses are disproportionate and consumers are unwilling to pay for all of this.”
The first thing the new sites should do, Smith said. “We can take an existing old dealership, or an existing old facility, maybe a Big Box store, and turn it into a sales and refurbishment center,” he said.
It is even less expensive to build or modernize a satellite delivery and acquisition center, where a visitor can receive a car or truck that they purchased online and/or sell their acquisition, Smith said.
Sonic President Jeff Dyke said in the convention call that corporate estimates can load about 20 EchoPark deliveries and acquire centers consistent with the year, and about 3 at EchoPark center locations.
Dyke stated that loose delivery to the customer’s location is not part of the plan, partly because it is expensive, and in the Sonic component believes that consumers need an expert user to inform them about their new purchase, rather than a driving force that simply deposits the keys.
“No, we’ll deliver the last mile, ” he said. “That’s where you go up a lot of complexity and a lot of costs.”
I am a journalist with more than 25 years of pleasure in writing and working in the automotive industry. After graduating from the University of North Carolina with a degree in journalism,
I am a journalist with more than 25 years of pleasure in writing and working in the automotive industry. After graduating in journalism from the University of North Carolina-Chapel Hill, where I am a scholar from Morehead, I started with the much-loved Nashville Banner, an evening newspaper. My speed included Saturn Corp. GM’s in Spring Hill, Tennessee, when the plant was still hollow on the ground, as well as the giant Nissan plant nearby. This became an article in Automotive News, the automotive industry’s leading advertising newspaper, as a single workplace in New York, encompassing European luxury brands, Wall Street, publicly traded broker groups, retail car finance, and monthly car sales. A four-year period as head of market research and corporate strategy at Mercedes-Benz USA gave me an internal perspective. More recently, my independent tasks have included Advertising Age, Automotive News, AutoWeek, Bankrate.com, Businessweek.com, CBS Interactive, The Financialist through Credit Suisse, ForbesAutos.com and Forbes.com. I’m also the former editor of Auto Finance News in New York.