Sonic Automotive
Encyclopedia
Sonic Automotive, Inc. is a Fortune 300 company based in Charlotte, North Carolina
and is one of the largest automotive retailers in the United States
. The company was founded by NASCAR
track owner Bruton Smith
.
Sonic Automotive operates in 15 states with 176 dealerships and represent 37 different brands of automobiles. These dealerships provide numerous services including sales of new and used cars, sales of replacement parts, vehicle maintenance, warranty, paint and collision repair services, and arrangement of extended warranty contracts, financing, and insurance for the company's customers.
Major competitors include AutoNation
, Group 1 Automotive
, and Penske Automotive Group
. Sonic's annual revenue is roughly 8 billion dollars annually.
Sonic, the nation's third-largest dealership group, has an agreement to buy a Mercedes store in Charlotte, N.C., Sonic's hometown. But Sonic President Scott Smith says Mercedes-Benz won't approve the purchase unless Sonic meets the automaker's demands for upgrades at four of the nine Mercedes dealerships it already owns.
The retailer is suing Mercedes-Benz in a North Carolina court, asserting that the automaker cannot legally tie the acquisition to renovations at other dealerships. Smith says Sonic is upgrading its stores adequately for far less money than Mercedes-Benz's "Autohaus" plan demands. At one dealership, Smith says, Mercedes-Benz wants Sonic nearly to double the size of the showroom to 16000 square feet (1,486.4 m²).
"They are trying to extort all they can," Smith told Automotive News. "It's so unfair. Mercedes-Benz is holding the transaction hostage."
Mercedes-Benz declined to comment on the dispute.
Automakers such as Mercedes-Benz are using their power to block franchise transfers to promote dealership improvement programs, say brokers and lawyers who represent dealers. In some cases, dealers complain, the exercise of that influence has caused lucrative agreements to sell their stores to collapse.
Sonic's complaints are not limited to Mercedes-Benz. Smith says Sonic is having trouble selling four Toyota dealerships because of the automaker's building requirements under its "Image USA II" architectural plan. Smith says dealers cannot "invest where it doesn't make sense."
Toyota declined to comment.
Charlotte, North Carolina
Charlotte is the largest city in the U.S. state of North Carolina and the seat of Mecklenburg County. In 2010, Charlotte's population according to the US Census Bureau was 731,424, making it the 17th largest city in the United States based on population. The Charlotte metropolitan area had a 2009...
and is one of the largest automotive retailers in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The company was founded by NASCAR
NASCAR
The National Association for Stock Car Auto Racing is a family-owned and -operated business venture that sanctions and governs multiple auto racing sports events. It was founded by Bill France Sr. in 1947–48. As of 2009, the CEO for the company is Brian France, grandson of the late Bill France Sr...
track owner Bruton Smith
Bruton Smith
Ollen Bruton Smith is a promoter and owner/CEO of NASCAR track owner Speedway Motorsports, Inc. He was ranked #207 on the Forbes 400 list with an estimated worth of $1.5 billion in 2005, and fell to #278 in 2006. He is divorced with four children...
.
Sonic Automotive operates in 15 states with 176 dealerships and represent 37 different brands of automobiles. These dealerships provide numerous services including sales of new and used cars, sales of replacement parts, vehicle maintenance, warranty, paint and collision repair services, and arrangement of extended warranty contracts, financing, and insurance for the company's customers.
Major competitors include AutoNation
AutoNation
AutoNation, the largest auto retailer in the USA, was founded in 1996 by entrepreneur H. Wayne Huizenga, also founder of Blockbuster and Waste Management. The company is headquartered in Fort Lauderdale, Florida. The current Chairman and CEO is Mike Jackson, former CEO of Mercedes Benz North America...
, Group 1 Automotive
Group 1 Automotive
Group 1 Automotive, Inc. is a Fortune 500 company, founded in 1997. It has its headquarters in the One Memorial City Plaza building in the Memorial City district of Houston, Texas....
, and Penske Automotive Group
Penske Automotive Group
Penske Automotive Group , headquartered in Bloomfield Hills, Michigan, is the world's second largest automotive dealership group.PAG operates 327 retail automotive franchises, representing 42 different brands, and 26 collision repair centers. PAG is a member of the Fortune 500 and Russell 2000, and...
. Sonic's annual revenue is roughly 8 billion dollars annually.
Controversy
Sonic Automotive Inc. has accused Mercedes-Benz USA of seeking to "extort" millions of dollars in unneeded dealership improvements from the public retailer.Sonic, the nation's third-largest dealership group, has an agreement to buy a Mercedes store in Charlotte, N.C., Sonic's hometown. But Sonic President Scott Smith says Mercedes-Benz won't approve the purchase unless Sonic meets the automaker's demands for upgrades at four of the nine Mercedes dealerships it already owns.
The retailer is suing Mercedes-Benz in a North Carolina court, asserting that the automaker cannot legally tie the acquisition to renovations at other dealerships. Smith says Sonic is upgrading its stores adequately for far less money than Mercedes-Benz's "Autohaus" plan demands. At one dealership, Smith says, Mercedes-Benz wants Sonic nearly to double the size of the showroom to 16000 square feet (1,486.4 m²).
"They are trying to extort all they can," Smith told Automotive News. "It's so unfair. Mercedes-Benz is holding the transaction hostage."
Mercedes-Benz declined to comment on the dispute.
Automakers such as Mercedes-Benz are using their power to block franchise transfers to promote dealership improvement programs, say brokers and lawyers who represent dealers. In some cases, dealers complain, the exercise of that influence has caused lucrative agreements to sell their stores to collapse.
Sonic's complaints are not limited to Mercedes-Benz. Smith says Sonic is having trouble selling four Toyota dealerships because of the automaker's building requirements under its "Image USA II" architectural plan. Smith says dealers cannot "invest where it doesn't make sense."
Toyota declined to comment.