Dealerships in Texas and other southern states are grappling with closures and reduced operations amid rounds of hazardous winter weather that have crippled the region over the last three days.
Sonic Automotive Inc., the nation’s sixth-largest new-vehicle dealership group, has been forced to close all 12 of its franchised dealerships and used-only EchoPark stores in Texas. Sonic President Jeff Dyke said the dealerships have been “basically closed” all week amid the weather, lack of power and water issues in the Lone Star state.
Texas is Sonic’s largest market by revenue, representing 28 percent of the company’s revenues. It’s the largest EchoPark market with six locations and is one of its largest franchised markets, with dealerships in the Dallas and Houston areas.
Dyke told Automotive News Wednesday that with more frigid temperatures and snow in the forecast, he doesn’t anticipate much changing in Texas until the weekend.
“I’m assuming we’re not going to start seeing some robust movement around this state until Saturday,” he said.
Pete DeLongchamps, a senior vice president at Houston-based Group 1 Automotive Inc., said most of the company’s 78 stores in Texas are closed, and will remain so until power comes back on.
“We want to open as soon as possible but you can’t do it without power,” he said. In the meantime, he said the safety of the group’s employees remains a priority.
Sonic CFO Heath Byrd, during the company’s fourth-quarter earnings call with investors and analysts on Wednesday, said the winter storm will have some impact on first-quarter financial results. Byrd said stores in the Nashville and Birmingham, Ala., markets also have been affected by storm and closures.
April Ancira, vice president of Ancira Automotive Group, which has several stores in and around San Antonio, said reopening keeps getting pushed back.
The group has 11 stores spread throughout central and southern Texas. They were closed Wednesday, according to a note on the group’s website.
“Unfortunately, as most of Texas has seen, it’s not just snow or powder,” Ancira said. “It’s been freezing rain … making it dangerous for any employees to get to work.”
Ancira at first thought dealerships were prepared for the winter weather, what with some sales and appointments already happening online due to the COVID-19 pandemic. But then came power, cellular and internet outages.
“The irony is people are finding their cars to be incredibly important right now, as they all seem to be hunkering down in them for warmth,” Ancira said.
Rick Ford, CEO of RFJ Auto Partners Holdings Inc., which has numerous stores in Texas, said Wednesday that Texas doesn’t have the infrastructure to handle such storms.
“So we’ve been, if not totally closed, partially closed for most of the week,” he said.
RFJ of Plano, Texas, ranks No. 43 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 20,428 new vehicles in 2019.
Melissa Burden and David Muller contributed to this report.