Sonic Automotive, Inc. (NYSE:SAH) Q3 2023 Earnings Call Transcript

Jeff Dyke: 100%. This is Jeff 100%. There’s a lot of discounts going on. And depending on the manufacturing, remember we’re in its infancy right now. So everybody is learning including the manufacturers. We’ve got a 26-day supply of BMW EVs on the ground. We’ve got a 58-day supply of Mercedes EVs on the ground. Our margins are better on BMWs right now than they are on Mercedes. They’re — BMW is still in the same range as a ICE vehicle margin. So I think they’ve done a really good job in managing that. Mercedes got out a little bit ahead of themselves in terms of inventory. Product is great and we’re selling a lot of it on the East Coast I think among the largest sellers in the country maybe the world of EVs for both of those brands.

But there’s still challenges ahead. The prices are too high. The product is fantastic. Customers need to get used to the product. There’s a lot of work to be done to get us there. And we’ll get there over time. The manufacturer is going to be discounting. There’s no question about that in the coming quarters. That’s great for us. We’ll sell more cars drive more F&I and drive more profitability in the company.

Heath Byrd: And this is Heath. You’ve seen probably a lot of manufacturers talk about the market for hybrid vehicles and especially Toyota and that being the transition really from the combustion engine to EV. And so, hybrids are great for us. We love the product and it’s really good for service. So we think that’s going to be more of a demand like health and EV.

Patrick Buckley: Great. Very helpful. That’s all for me. Thanks guys.

Operator: And we have reached the end of the question-and-answer session. I’ll now turn the call back over to the CEO, David Smith for closing remarks.

David Smith: Great. Thank you very much. Thank you everyone for joining us and have a great day talk next quarter.

Operator: And this concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.