Sonic Automotive Pres. Jeff Dyke on record earnings: ‘we’re not slowing down’

Sonic Automotive, one of the auto industry’s top performers, had an incredible 2021. The expansion of its pre-owned brand EchoPark Automotive, the acquisition of RFJ Auto Partners, and record net incomes are a reflection of this. The Fortune 500 company based in Charlotte, North Carolina is reporting record fourth-quarter revenues of $3.2 billion, up 13.8% year-over-year. 

Today on Inside Automotive, we’re pleased to welcome back Jeff Dyke, President of Sonic Automotive, to share his insight and perspective on 2021 earnings and where the company is headed in this new year. 

Fourth-quarter highlights: 

  • Record Q4 income from continuing operations before taxes of $122.1 million, up 35.1% year-over-year
  • Record Q4 net income from continuing operations of $96.3 million ($2.25 per diluted share)
  • All-time record quarterly total F&I gross profit per retail unit of $2,415, up 18.9% year-over-year
  • Record Q4 EchoPark revenues of $579.2 million, up 49.7% year-over-year

Business is great from Dyke’s perspective. While inventories are tight for both new and pre-owned cars, margins are at all-time highs. He would like inventory will come back a little more, but not all the way to pre-COVID levels. Right now, Sonic Automotive has an eleven-day supply average of new vehicles. They are hoping that number grows to 20 or 25, but no more than 30 days. That will keep margins in line and encourage more consumers to pay MSRP, says Dyke.

In fact, Dyke prefers to reduce price negotiations with customers by using one-price selling models. He believes MSRP is the fairest price for the vehicle, and by reducing negotiations, the industry can transform the car buying culture from ‘lowest price’ to ‘best experience.’

The company certainly practices what it preaches. EchoPark Automotive now has the highest scores on in the industry among all pre-owned car dealers.

“We’ve having a great time and working hard and I think that pays off,” says Dyke.

In terms of inventory shortages and market adjustments, Dyke says that Sonic Automotive strategizes for the long term. The business is moving forward, full-steam ahead, and no decisions are being made based on short-term events.

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