Sonic’s Hybrid F&I Pilot Experiences Training, Staffing Issues
October 23, 2014
CHARLOTTE, N.C. — In the third quarter, Sonic Automotive’s F&I gross profit per retail unit increased $93, or 8.3%, from a year ago to $1,207. But that per-copy average didn’t include results from the Charlotte, N.C., store piloting the group’s One Sonic-One Experience initiative.
Launched on Aug. 1 at Sonic’s Town and Country Toyota dealership, the One Sonic-One Experience program aims to deliver a “one associate at one price in one hour” experience to Sonic customers. The original launch date was July, but the group revealed that testing didn’t begin until Aug. 1. And despite staffing and training issues, officials maintain that the program, which aims to increase transparency and trust with customers, will eventually lead to increased profits.
“We sold so many cars to begin with, our F&I department was just overwhelmed,” said Jeff Dyke, executive vice president of operations at Sonic. “We did have a bit of degradation in F&I, but we have since recovered.”
The company increased training and added document specialists to help. “It was more a training and, quite frankly, an education for us,” said Dyke. “We think we can pretty much wipe out that valley we created ourselves. I expect our F&I to go up.”
As for the rest of its operations, Sonic posted record new-vehicle retail sales of 36,301 units in the third quarter, a 6.5% increase from a year ago. Third-quarter net income increased 6% from a year ago to $24.7 million, while revenues rose 5% to $2.36 billion.
The company also posted total gross profits of $341.5 million, up $15.4 million from a year ago. Sonic also posted a record pre-owned gross profit of $41.2 million, a 5.8% increase from a year ago.
The company is planning to roll out the One Sonic-One Experience program to the rest of the Charlotte market by the end of the year. It expects companywide implementation in 24 months.
“We were able to deliver record-breaking results while still driving forward with our EchoPark (standalone pre-owned stores) and One Sonic-One Experience initiatives,” said B. Scott Smith, Sonic’s president. “Initial results from our One Sonic-One Experience test store in Charlotte met our expectations and we plan to continue the rollout of this initiative to the entire Charlotte market in the fourth quarter.”