NEW YORK -

Sonic Automotive says more than 130 to 150 monthly used-vehicle sales at each of its stores are possible, and suggests the key to reaching this perch are two new programs it has recently implemented: True Price and the Sonic Inventory Management System.

Sonic chief financial officer Heath Byrd, speaking at the Goldman Sachs 2013 Global Retailing Conference last week along with chief accounting officer CG Saffer, says the retailer, without a doubt, sees the pre-owned side as “one of our core competencies.”

In a transcript of the presentation from SeekingAlpha.com, Byrd explained: “If you actually look at our comps, we’re in a different cycle in our company than some of our peer group, and so our comps look lower but that’s because we grew so quickly over the last two years.

“So we are very confident with our used business. We feel like there’s the opportunity of well over 130 to 150 vehicles per store per month; and again, SIMS and the implementation of SIMS and True Price are what’s going to drive that capability.”

To recap, SIMS is a program launched earlier this year that “centralizes 100 percent of our pre-owned inventory management, from appraisals to pricing to buying and, shortly, even selling at auctions,” Sonic executive vice president of operations Jeff Dyke explained in February during an earnings conference call shortly after SIMS was rolled out.

During the company's Q2 2013 conference call a few months later, Dyke emphasized how SIMS was helping push Sonic to its best used month ever.

As for True Price, it’s a one-price strategy the company has been utilizing this year, and Byrd provided a bit more color on this during the Goldman Sachs conference.

Acknowledging that both new and used gross profits per units felt a “drag” from the implementation of True Price in the first two quarters, Byrd said it won’t be long before that situation turns around.

In fact, when asked by the moderation when he saw the “True Price implementation flipping from a headwind, to a tailwind,” Byrd said his conservative answer would be the fourth quarter.

However, he emphasized that “we’re seeing a lot of traction, especially in used in the third quarter.”

Byrd then explained this in further detail, noting the two-pronged aspect.

“You’ve got the implementation side, to implement strategy correctly, and then second is, does it work in the market? Those are the two components to see if this is a good strategy, and we have seen (that) when we implement it, it works very well,” Byrd said.

“When we don’t implement well, when we have stores that struggle with the implementation, that’s where we have to spend more time to be sure that it takes hold. So we feel very confident with the strategy in the market; it’s just an implementation risk.”

SeekingAlpha’s complete transcript can be found here:
http://seekingalpha.com/article/1684332-sonic-automotives-cfo-presents-at-goldman-sachs-2013-global-retailing-conference-transcript.

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