Tesla Motors Inc (TSLA) & Sonic Automotive Inc (SAH): Top Stock Picks From Automotive Industry?


Tesla Motors Inc (NASDAQ:TSLA) and Sonic Automotive Inc (NYSE:SAH) might appear as chalk and cheese, but a closer look reveals that they are more alike than different. While one is an electric car manufacturer that wants to end the dealership distribution model, the other’s business model is based on dealership, but what makes them similar is innovation. Both Tesla Motors Inc (NASDAQ:TSLA) and Sonic Automotive Inc (NYSE:SAH) are the leaders in innovation in the automotive industry. Market Watch recently did a story on a note published on Sonic Automotive Inc (NYSE:SAH) by Morgan Stanley’s analysts that called Sonic Automotive Inc (NYSE:SAH) as the Tesla Motors Inc (NASDAQ:TSLA) of Car Dealership industry.

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The reason that Morgan Stanley analysts are so optimistic about Sonic Automotive Inc (NYSE:SAH) is the company’s new sales model that allows customers to buy a car, along with all the necessary paperwork, within 60 minutes. This is one of the first times a car dealership is putting in the efforts to reduce the time that it takes for a consumer to buy a car, which is often compared with the time it takes to buying a house rather than a typical retail purchase.

 Sonic Automotive Inc (NYSE:SAH) revealed its new car buying system last year, with plans to roll out by the end of this year. The company said that it took it four years and $45 million in expenses to come up with this new car buying model which will offer consumers a paperless car buying experience. Analysts at Morgan Stanley predict that it could take the company around two years to for the full roll out of this new car buying model. While praising the company in their note, the analysts called both Sonic Automotive Inc (NYSE:SAH) and Tesla Motors Inc (NASDAQ:TSLA) as the mavericks in automotive industry.

As of June 30, 2014, Daniel Benton’s Andor Capital Management owns 1.25 million shares of Tesla Motors Inc (NASDAQ:TSLA) and Ricky Sandler’s Eminence Capital owns over 2.9 million shares of Sonic Automotive Inc (NYSE:SAH).

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