- Sonic Automotive
Sonic Automotive, Inc. (nyse|SAH) is a
Fortune 300 company based inCharlotte, North Carolina and is one of the largest automotive retailers in theUnited States . The company was founded byNASCAR track ownerBruton Smith .Sonic Automotive operates in 15 states with 176
dealerships and represent 37 different brands ofautomobiles . 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 , andPenske Automotive Group . Sonic's annual revenue is roughly 8 billion dollars annually.Controversy
articleissues
POV=June 2008
unreferenced = June 2008Sonic 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 16,000 square feet.
"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.
External links
* [http://www.sonicautomotive.com/ Sonic Automotive, Inc.]
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