Top 100 Retailers supplement - S3

Digital newcomers hope to gain more ground

David Muller

No. 6 spot, just behind Lithia Motors. Sonic's used-vehicle retail
sales grew 16 percent in 2019 to 162,149. It got a boost from its
EchoPark Automotive specialty used-vehicle stores, which saw
retail volume rise 68 percent in 2019 to 49,520 units.
In announcing the group's full-year results in February, CEO
David Smith hailed EchoPark for aiding an "exceptional" year
for the dealership group. Smith said at the time that the
company planned to open three EchoPark stores in 2020. It had
nine standalone EchoPark locations.
At press time, Sonic had not provided an update on its
business in light of the coronavirus. Other publicly traded
retailers planned layoffs or furloughs and slashed executive pay
and other costs.

dmuller@crain.com

nline retailers continue to make gains in usedvehicle sales, and with the coronavirus pandemic
keeping many shoppers home this spring, they hope
to further their foothold in 2020.
In our 2019 ranking of the top 100 used-vehicle retailers,
upstart Carvana jumped to No. 4, after making its debut at No. 8
in 2018. Carvana's used-retail units jumped 89 percent in 2019
to 177,549. The Tempe, Ariz., company accomplished this feat
with an asset-light approach that included vending machines
and vehicle reconditioning centers but otherwise relied mostly
on its Web presence.
It trailed only CarMax, Penske Automotive Group and
AutoNation, which were 1, 2 and 3, respectively, in 2018 as well.
CarMax posted record sales in its latest fiscal year but, like
others, has seen a stark change in business just over three
months into 2020. Many retailers were headed into the busy
spring selling season with used-vehicle sales poised to be
above 2019 levels. The outbreak of the novel coronavirus
caused a pandemic that arrived in earnest in the U.S. market in
mid-March.
That's when retailers began to see declines.
Cox Automotive Chief Economist Jonathan Smoke said in a
conference call April 7 that there would likely be a historic decline
in vehicle sales in the second quarter of 2020, with a potential
recovery perhaps arriving in the second half of the year.
That outlook assumes the pandemic - which kept many
retailers closed in mid-April and millions of consumers mostly
confined to their homes - improves sooner rather than later.
For 2020, Smoke said new-vehicle sales could fall below 12
million units and used-vehicle sales could drop below 31
million. Used-vehicle volume has been estimated at about 40
million units for the past several years, and before March it was
expected to remain at that level in 2020.
If the virus-caused slowdown lasts longer than expected or
reoccurs, new-vehicle sales could fall below 11 million, and
used-vehicle sales could drop below 29 million, Smoke said.
"That's a bleak outlook, compared to where we were in
January," Smoke said. "I hope we're wrong."

'Catalyst' for online sales?
Vroom CEO Paul Hennessy told Automotive News that his
company had seen a decline since the outbreak of the
pandemic caused mass stay-at-home orders in the U.S., but as
traditional auto retailers leaned more toward digital sales, often
out of necessity, he said his company was well-positioned to
capitalize in 2020.
Vroom, a digital newcomer similar to Carvana, made its
debut in Automotive News' 2019 used-vehicle retail rankings at

Coming off good year

Robby Findlay, Findlay Automotive Group's director of
operations, says the group focused on enhancing its digital
presence and put more emphasis on used-vehicle sales.

No. 16, thanks to unit sales of 31,963.
"There's nothing we can do if people are out of work and
deferring larger purchases," Hennessy said. He added that the
7-year-old company will still be selling its "fair share" of the
total vehicles moved in 2020.
"And because of our model, we think we're going to get a
disproportionate share," he added, explaining that "as dark as
this is" it could be a "catalyst" to more consumers buying
vehicles from online retailers.
Sonic Automotive skipped past Group 1 Automotive for the

But all retailers were feeling the brunt of the pandemic, after
seeing strong sales in 2019.
Findlay Automotive Group, based in Henderson, Nev.,
jumped seven spots in the 2019 rankings to No. 33. Its usedvehicle retail sales grew 17 percent to 20,504.
Robby Findlay, the group's director of operations, credited
the success last year to using Cox Automotive's vAuto software
to implement competitive pricing and focus on vehicle turns.
He also said the group zeroed in on enhancing its digital
presence, particularly its vehicle images.
In the first quarter of 2019, the 32-store group parted ways
with an outside vendor and brought its vehicle photography inhouse, while also buying four photo booths. "And just got
cleaner, crisper pictures for customer viewing," Findlay said.
The group, which has stores in Nevada, Arizona, Utah, Idaho
and Oregon, had traditionally been more focused on newvehicle sales. "We still focus more on new, but I think in the last
year we've realized the importance of used-vehicle sales,
probably before the COVID-19 outbreak," he said. "It's become
a bigger focus."
Findlay said the group was on a record pace for used-vehicle
sales in the first quarter of 2020 and was ramping up inventory
levels for tax-return season. "Who knows what it's going to be
like now?" Findlay said. "We thought it was going to be a record
used-car year."
Since the outbreak, Findlay Auto Group has been doing three
to four times more online sales and at-home deliveries as
usual. At the same time, foot traffic at the group's brick-andmortar stores has been at about 40 percent of its typical level.
Even before the coronavirus pandemic struck, Findlay said
one of his biggest takeaways from 2019 was that "CarMax and
Carvana and some of these other disrupters really stepped
their games up. And I think it made us realize that if we don't
become better at used cars, we're going to be on the outside
looking in." n

Top 100 Retailers supplement

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