CDK Extends Relationship With Sonic Automotive

Rhea-AI Summary

CDK, the leading automotive retail software provider, has extended its agreement with Sonic Automotive, Inc. (NYSE: SAH), a major automotive and powersports retailer. The deal includes providing Sonic Automotive dealerships with the CDK Dealer Management System (DMS) and Dealership Xperience Modern Retail Suite. This software suite connects the consumer-to-dealer buying journey into a unified transaction, enhancing customer experience.

The partnership allows Sonic Automotive to leverage CDK's artificial intelligence (AI) features, including predictive modeling for customer buying propensity, machine learning for anticipating vehicle service opportunities, and the new CDK AI Virtual Assistant (AIVA) for personalized customer engagement.

CDK's software powers the majority of franchise dealerships in North America, including five of the six publicly held dealership groups in the U.S. as of 2024. This extension reinforces CDK's position at the center of the automotive ecosystem and its commitment to driving digital transformation in the industry.

Positive

• Extended agreement with major automotive retailer Sonic Automotive (NYSE: SAH)
• Provides DMS and Dealership Xperience Modern Retail Suite to Sonic Automotive
• Offers AI features including predictive modeling and machine learning
• Powers majority of franchise dealerships in North America
• Serves five out of six publicly held dealership groups in the U.S.

Negative

• None.

Insights

Technology Analyst

The renewal of CDK's contract with Sonic Automotive is a significant development in the automotive retail software sector. This partnership leverages CDK's advanced AI-driven tools, including predictive modeling and machine learning, to enhance customer engagement and streamline operations across Sonic's dealerships.

The integration of CDK's Dealership Xperience Modern Retail Suite is particularly noteworthy, as it unifies the consumer-to-dealer buying journey. This could potentially increase sales efficiency and customer satisfaction for Sonic Automotive, which may positively impact their bottom line.

CDK's dominant market position, powering the majority of franchise dealerships in North America, including 5 out of 6 publicly held dealership groups, underscores its critical role in the industry. This renewed partnership with a major player like Sonic Automotive ($2 billion market cap) reinforces CDK's market leadership and could signal continued growth in their enterprise value.

For Sonic Automotive investors, this partnership indicates a commitment to technological advancement and operational efficiency, which could translate to improved performance metrics in the medium to long term. However, the financial terms of the deal are not disclosed, making it challenging to quantify the immediate impact on Sonic's financials.

Top Publicly Held Dealer Group Renews DMS Contract with Dealership Xperience Modern Retail Suite

AUSTIN, Texas--(BUSINESS WIRE)-- CDK, the leading automotive retail software provider, today announced the extension of its agreement with Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive and powersports retailers, to provide its dealerships with the CDK Dealer Management System (DMS) and its Dealership Xperience Modern Retail Suite, a set of powerful software tools that connects the consumer-to-dealer buying journey into a single, unified transaction for a more satisfying experience.

By continuing this partnership with CDK, Sonic Automotive dealerships can leverage CDK artificial intelligence (AI) features to better engage with consumers. This includes predictive modeling that creates visibility into a customer’s propensity to buy based on their specific purchase cycles, machine learning that helps anticipate potential vehicle service opportunities, and the new CDK AI Virtual Assistant (AIVA) that provides consumers with hyper-personalized, human-like engagement with sales and service departments.

“The automotive retail industry is constantly evolving, and we are committed to providing our teammates and guests with cutting-edge tools that make the vehicle search, purchase, and service processes as seamless as possible,” said David B. Smith, Chairman and CEO of Sonic Automotive. “Extending our partnership with CDK gives us access to forward-thinking innovation and scalable solutions to support that commitment and drive our business forward.”

As of 2024, CDK software is relied upon to power the operations of the majority of franchise dealerships in North America, including five of the six publicly held dealership groups in the U.S.

“We are excited to extend our longstanding relationship with Sonic Automotive as we continue to drive digital transformation across the industry with the depth and breadth of CDK software,” said Brian MacDonald, president and chief executive officer, CDK. “CDK is uniquely positioned at the center of the automotive ecosystem, and our relationship with Sonic Automotive is a testament to the great work our team has done to help their dealerships thrive and grow with confidence as we invest to constantly evolve our solutions for our rapidly changing industry.”

About CDK Global, Inc.

CDK Global is a leading provider of cloud-based software to dealerships and Original Equipment Manufacturers (“OEMs”) across automotive and related industries. The Company’s cloud-based, software as a service (“SaaS”) platform enables dealerships to manage their end-to-end business operations including the acquisition, sale, financing, insuring, repair, and maintenance of vehicles. By automating and streamlining critical workflows, the integrated platform of modern solutions enables dealers to sell and service more vehicles by creating simple and convenient experiences for customers and improves their financial and operational performance.

About Sonic Automotive, Inc.

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, North Carolina, is on a quest to become the most valuable diversified automotive retail and service brand in America. Our Company culture thrives on creating, innovating, and providing industry-leading guest experiences, driven by strategic investments in technology, teammates, and ideas that ultimately fulfill ownership dreams, enrich lives, and deliver happiness to our guests and teammates. As one of the largest automotive and powersports retailers in America, we are committed to delivering on this goal while pursuing expansive growth and taking progressive measures to be the leader in these categories. Our new platforms, programs, and people are set to drive the next generation of automotive and powersports experiences. More information about Sonic Automotive can be found at sonicautomotive.com and ir.sonicautomotive.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240930078450/en/

Lisa Finney

947-500-8992

Lisa.Finney@cdk.com

Source: CDK Global, Inc.

FAQ

What services will CDK provide to Sonic Automotive (NYSE: SAH) under the extended agreement?

CDK will provide Sonic Automotive with its Dealer Management System (DMS) and Dealership Xperience Modern Retail Suite, which includes AI features such as predictive modeling, machine learning, and the CDK AI Virtual Assistant (AIVA).

How will the CDK software benefit Sonic Automotive (NYSE: SAH) dealerships?

The CDK software will enable Sonic Automotive dealerships to better engage with consumers through AI-powered features, improve the vehicle search, purchase, and service processes, and create a more unified and satisfying customer experience.

What is CDK's market position in the automotive retail software industry?

As of 2024, CDK's software powers the operations of the majority of franchise dealerships in North America, including five of the six publicly held dealership groups in the United States.

What AI features does CDK offer to Sonic Automotive (NYSE: SAH) through its software?

CDK offers AI features including predictive modeling for customer buying propensity, machine learning for anticipating vehicle service opportunities, and the CDK AI Virtual Assistant (AIVA) for personalized customer engagement in sales and service departments.