CHARLOTTE, N.C. -

Sonic Automotive's third-quarter performance brought  record-breaking volume numbers for used and new sales, and the company continues to make progress toward its per store monthly used-sales goal. 

Sonic saw an average of 87 used retail sales per store this month, rising from 82 during the same period of last year.

The company —  which came in at No. 4 on Auto Remarketing's Top 125 Used Car Dealer Groups list ranked by 2011 used-vehicle sales  —  holds a goal of reaching 100 used sales per store per month, officials shared.

And the company's same-store retail volume for pre-owned vehicles during this past quarter broke company records.

“Our pre-owned business continues to improve as the third quarter was the largest pre-owned volume quarter in company history on a same-store basis,” Jeff Dyke, executive vice president of operations, said during the company’s conference call covering Q3 results held on Tuedsay morning.

Revenue from used sales was up 4.8 percent versus Q3 2011, coming in at $534 million, compared to $509 million last year.

Effects of Inventory Shortages; New Tech Rollout

During the conference call, Dyke also mentioned that a recent shortage of BMW inventory may have hurt the company’s traditional gross-profit levels this quarter, but days’ supply is on the rise.

“As you are aware, BMW represents 30 percent of our gross, and we had serious inventory shortages through July of this year. The great news is that inventory began to arrive in August, and sales began to increase. While our BMW volume was down in July some 8 percent, it was up 15 percent in August and 26 percent in September,” Dyke said.

Now, BMW inventory for the company sits at 50 days’ supply, after hitting a low of 34 in July.

Also, the company is getting ready to rollout a new centralized inventory system to all its stores that will revamp its dealerships supply processes all over the country.

Dyke explained that tools like the company’s new Sonic Inventory Management System will potentially help drive used sales this coming year.

“We continue to leverage technology and data to improve our customers' experience in our stores and create value.  For example, our new SIMS (Sonic Inventory Management System) and Retail Trade Center Process will completely revolutionize the way we manage, price and retail inventory across our stores.  We anticipate completing the roll out of these systems in February of 2013 with the full benefits of the systems yielding results in the second quarter of 2013.  We believe this will be another catalyst in driving our pre-owned performance in 2013,” Dyke said.

And the system has already seen “impressive” results through its region rollout in Texas.

Dyke called the results from the first rollout “fantastic, noting that “In August, we sold 118 units per store, and in September we sold 107 units per store. Both months were up 10 percent versus prior year,” for Texas stores using the SIMS system.
 
“This is a major inventory and process change, so for us to be well above the 100-unit mark signals what we expect to happen for the company as SIMs gets rolled out to the other stores by the end of the first quarter of 2013,” Dyke said.

Auto Remarketing reported on the new system when Sonic first revealed SIMS. For more details, see here.

Looking Forward

Looking forward to Q4, the company shared that as the automotive retail industry outlook remains positive as a whole, “it anticipates Q4 retail GPU (gross profit per unit) to improve from Q3 levels.”

Also, it noted it expects its luxury mix of stores to contribute to higher Q4 performance.

That said, this may be difficult if luxury units remain hard to find. According to data from AutoTrader.com, highline units are proving to be elusive this fall season.

According to September’s installment of vehicle scarcity data that is provided monthly to Auto Remarketing by AutoTrader.com, CPO luxury vehicles, in particular, are becoming increasingly scarce nationally.  

AutoTrader's data includes the 10 Most Scarce CPO Vehicles and 10 Most Scarce Late-Model Used Vehicles on a national scale and for each of the top 10 Designated Market Areas.

And what this data shows is that seven out of the top 10 hardest-to-find CPO vehicles in the country are luxury cars or SUVs.

For more information on this trend, see the Auto Remarketing story here.