The view appears rosy for pre-owned operations at Sonic Automotive, including expansion in its EchoPark standalone used-car stores.

The dealer group had its best-ever quarter for used retail sales and achieved more than 58-percent growth in its EchoPark sales, according to its quarterly earnings release.

Sonic retailed 30,933 used cars in the third quarter, an all-time high and a 1.5-percent year-over-year improvement. Through three quarters of the year, it has sold 89,553 used retail units, up from 88,903 used retail sales through Q3 of 2015.

The company’s EchoPark stores moved 1,458 units for a 58.5-percent year-over-year spike. It now has five Denver-area EchoPark outlets with expansion to come in 2017.

EchoPark growth “is continuing with two new stores operating during the quarter,” Sonic chief executive officer Scott Smith said in a news release.

“We are very excited that combined, our original three stores generated positive cash during the third quarter,” Smith said. “Our sixth Denver market store, located in Colorado Springs, will open during the first half of 2017.  In addition, we will break ground on our first Texas locations in the first half of 2017.”

Offering some overall commentary on the quarter and some used-car-specific insight, Sonic executive vice president of operations Jeff Dyke said in a news release: “We had another record quarter in fixed operations, F&I and pre-owned, but did face headwinds during the quarter. Stop-sale vehicles, BMW brand performance and weakness in one of our most profitable markets, Houston, negatively impacted our results. Given BMW's brand performance during the quarter and that BMW stores represent over 30 percent of our profitability, we were negatively impacted. 

“We have absolute confidence in the BMW brand and are working with our partners at BMW to address this bump in the road, which we view as a short-term issue. We are making progress with our stop-sale inventory with less than 2,200 units on hand at the end of the third quarter of 2016 compared to nearly 4,700 units on hand at the end of the second quarter of 2016,” he added. “Finally, we expect weakness to continue in the Houston market, especially in our high-line stores, through at least the end of the year as we believe the energy sector's recovery may take time to gain some momentum."

“Our One Sonic-One Experience stores are also making good progress and we plan to launch the technology in our first BMW store in the first quarter of 2017. The technology, pricing tools and OSOE playbook have continued to develop nicely and we are excited to see how these tools can be leveraged in a BMW retail operation,” Dyke continued. “We are confident that the implementation of OSOE will greatly enhance our BMW customers' buying experience as our EchoPark stores and current OSOE stores boast some of the very highest social media reputation scores in the industry.”