Sonic wants service profits to cover overhead.(Sonic Automotive Inc.)

From: Automotive News | Date: September 4, 2006| Author: | Copyright information

Byline: Donna Harris

Within three to five years, Sonic Automotive Inc. plans to cover all overhead costs at its 159 dealerships with service and parts profits.

A 100 percent service absorption rate would be unusual in the industry. The typical dealership has an absorption rate of 55 to 60 percent, the National Automobile Dealers Association says.

But Sonic President Jeff Rachor says the public dealership group already has a 90 percent absorption rate. Covering dealerships' fixed operating costs with gross profits from service and parts operations would help Sonic ...

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