When Auto Remarketing talked to Sonic Automotive’s Jeff Dyke this past summer about the retailer’s new inventory tool, the executive vice president of operations said the Sonic Inventory Management System would “change our whole company.”

At the time, SIMS was being used by a third of Sonic’s dealers. The group finished moving all of its dealers into the system this month, and change is already apparent.

“We were trading for three-and-half to four cars out of 10, prior to SIMS coming to life,” Dyke said during Wednesday’s conference call to discuss the company’s latest earnings performance. “Today, we’re trading for five-and-a-half to six cars (of 10) out of SIMS.”

SIMS “centralizes 100 percent of our pre-owned inventory management, from appraisals to pricing to buying and, shortly, even selling at auctions,” Dyke noted during the call.

As he explained this summer, instead of a used-car manager appraising a vehicle on the lot, vehicle details are transmitted to Sonic’s Charlotte, N.C., headquarters and analyzed against reams of other data before it is sent back to the store.

He emphasized Wednesday that “every single car in this company” is appraised and priced centrally out of the Charlotte headquarters.

Dyke was asked during the Q&A portion of the call whether SIMS was geared more for acquiring more vehicles or getting them for better prices and, thereby, improving margins.

“I think it’s all the above,” he responded. “It allows us to trade for more cars … because if you have a group at your Trade Center, we’ve got 15 people looking at 20,000 to 30,000 cars a month. Their ability to look at a car and place it in the right market is a lot greater than a single person sitting at one dealership in a marketplace.

“It allows us to price our cars better because we’re using data to make decisions instead of how we feel about a car, which is very important. And then it allows us to purchase cars online and represent our cars live from our Trade Center at the auction via video links. So, we’re controlling 100 percent of our inventory, 100 percent of the time through our Trade Center and our SIMS inventory management system.”

Dyke expressed confidence Wednesday that Sonic would eclipse per-store per-month used retail sales of 100 units during the second half of the year and eventually hit 150. SIMS is a big reason why.

“Just getting on line in all of our stores this month, we just see all kinds of fun things happening and our business is going to go,” he said. “That’s why I’m so confident we’ll get past the 100-unit mark towards the back half of the year as everybody gets used to the tool, and then we can set our sights on 150 units.”

Dyke added: “The system is helping us move cars to the right store once we trade for it; it’s helping us price the car right the first time, instead of having to put our customer in a position where we’re negotiation back and forth; and it’s helping us trade for more cars. So, all across the board, it’s making a big difference and will make a huge difference as we go forward and everybody gets used to centralized inventory management.”

Editor's Note: Auto Remarketing Staff Writer Nick Zulovich contributed to this report.
 

Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.