Sonic Automotive is about to launch its biggest brand-awareness ad campaign ever for its EchoPark used-only channel — which is still under the radar in many markets, despite being nearly 12 years old.
“We have said over and over, we are objectively the lowest price of anyone in the market. We are objectively the best customer experience for as good or better product of car. The one missing part is awareness,” said Sonic CFO Heath Byrd, in a third-quarter earnings call on Oct. 29.
To boost awareness, Sonic expects to spend an additional $5 million to $7 million in the fourth quarter to promote the EchoPark brand, said David Smith, chairman and CEO.
In earlier calls, Sonic officials said total spending on the EchoPark marketing campaign — which is planned to continue through 2027 — would be in the range of $10 million to $20 million. Besides promoting brand awareness, the new ad campaign will also promote EchoPark’s e-commerce app and below-market pricing.
Sonic, based in Charlotte, North Carolina, also expects to open a new EchoPark location in the Orlando metro area in December, plus another two to four locations in 2027. EchoPark currently has 18 locations, according to an investor presentation. To put that in context, Sonic’s franchised dealership segment has 108 locations nationwide.
What happened to EchoPark? Besides a lack of brand awareness, during and after the pandemic EchoPark was also missing an adequate supply of relatively affordable used cars up to 3 years old, which were central to the EchoPark business model.
Late model used-car inventory fell across the whole industry, not just at EchoPark, driving used-car prices sky-high. That’s because new-vehicle production fell — first because of auto plant shutdowns, and then because of computer-chip shortages after pandemic-related shutdowns ended. With new-vehicle sales down, trade-ins fell, too.
As a result, Sonic hit the pause button on EchoPark’s growth and cut its ”hub-and-spoke” network of locations from 52 in 21 states at the end of 2022, to 18 in 10 states at the end of 2025. Sonic kept open EchoPark’s bigger “hubs,” equipped to perform reconditioning, but dropped the smaller “spoke” locations.
But as new-car production has slowly bounced back, so has the supply of late-model used cars, including a growing number of 3-year-old off-lease vehicles.
The shifting used vehicle sales tides have started to translate to financial results for the company unit. In the third quarter, EchoPark revenues were up 14% year-over-year to $596.0 million, and total gross profit was up 8% YoY to $58.9 million. EchoPark retail used vehicle sales reached 19,923 units in Q3, up 22%.
However, Smith said in the call that EchoPark total gross profit per unit in Q3 was $2,972, down 12% YoY. He also said EchoPark F&I income per vehicle was down due to a higher mix of battery-electric and higher-mileage vehicles, which resulted in lower sales of F&I products.
