EchoPark, a branch of Sonic Automotive that focuses on used vehicles, retailed 11,051 units during the first quarter of 2019, doubling its volume from 2018.
This substantial growth in volume is representative of the appetite in the market for used vehicles.
"To add perspective to the potential scale of EchoPark, its pre-owned unit sales comprised 28.7% of consolidated Sonic pre-owned unit sales in the first quarter of 2019," said David Smith, Sonic and EchoPark's CEO. "This is currently being accomplished through eight locations that sever a multitude of markets across the United States. As we expand our footprint into other areas across the country, we believe EchoPark will exceed the overall volumes and profitability of our franchised dealerships."
New Vehicle Costs Benefiting Used Vehicles
This confidence in Sonic Automotive's used-vehicle arm is, in part, driven by the performance of new-vehicles at its franchised dealerships. At Sonic's franchised dealerships new-vehicle revenue was down 4.6% year-over-year on a same-store basis.
This drop in new-vehicle sales and growth in used-vehicle sales is not exclusive to Sonic Automotive. Rising new-vehicle prices are already beginning to hurt new-vehicle sales volume throughout the industry; in the first quarter of 2019 overall new-vehicle sales declined 4%, according to Cox Automotive.
With the new market becoming decreasingly affordable, more buyers are looking at late-model used vehicles.
The growth in unit sales that EchoPark experienced led to an 89.8% growth in revenue. The $249.6 million in revenue that EchoPark realized in the first quarter puts the business on track to exceed $1 billion through full-year 2019, the company noted.