Sonic Automotive said last year’s investment in omnichannel used car stores has paid off.
The auto retailer’s latest earnings report showed that its EchoPark preowned vehicle business saw record revenues in its most recent quarter and 2022 as a whole, according to a Wednesday (Feb. 15) news release.
“Despite a challenging used vehicle industry backdrop, we remain committed to EchoPark’s long-term potential and are focused on executing strategic enhancements to the business model in 2023, while maintaining our target of 90% U.S. population coverage by 2025,” Sonic Automotive President Jeff Dyke said in the report.
The earnings report showed the company reaching record quarterly revenues of $3.6 billion, a 13% increase from last year, and fourth quarter gross profit of $576.1 million, up 9% year over year, another record.
The challenges Dyke referred to stretch across the auto industry, affecting sales of new and used cars alike. Companies like Carvana and CarMax have seen sales flag recently, while auto repair/auto part retailers have reported higher revenues as consumers hold onto cars longer.
(One exception has been the luxury car sector, where brands are thriving the same way high-end goods are thriving in other industries.)
These challenges were in place last year, when Sonic Automotive announced it was expanding its EchoPark Automotive brand by opening a new retail hub in Raleigh, North Carolina.
The company said Wednesday it is continuing its expansion by acquiring Black Hills Harley-Davidson, “the world-wide preeminent Harley-Davidson dealership located in Rapid City, South Dakota and home of the Sturgis Motorcycle Rally, the largest motorcycle rally in the world.”
Sonic said the purchase brings its powersports portfolio to 13 locations, and the company expects this part of the business to add around $200 million in revenue this year.
PYMNTS examined the future of online car buying earlier this month in a conversation with Tarek Kabrit, co-founder and CEO of United Arab Emirates-based car shopping app Seez.
After wrapping a funding round in February 2020, Seez had a choice to make, Kabrit told PYMNTS’ Karen Webster: “We either cut our costs and extend our runway, in startup lingo, or we take a step back and think, ‘How is the world going to change?’”
Dealers needed to embrace digitization, so Seez went for it. It became the third most popular app in the UAE after Tinder and telecom companies, and it proved a car could be sold online in as little as 12 minutes.
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