Carvana is shifting its business model by integrating new vehicle sales into its existing online platform, a move that could significantly impact the traditional dealership landscape. The company has acquired Stellantis franchised dealerships, which will serve as locations for test drives and vehicle services, while all sales transactions will occur online.
Tom Taira, Carvana's president of special projects, emphasized that the purchasing process remains consistent with their used vehicle sales, highlighting a departure from traditional dealership practices. Carvana's market capitalization exceeds $70 billion, and this new strategy aims to increase its customer base and market share.
The company has invested approximately $171 million in acquiring these dealerships and is focusing on enhancing the customer experience through a self-guided purchasing process. However, Carvana faces challenges with vehicle inventory, as it currently has around 3,000 new vehicles available compared to over 60,000 used models.
The success of this strategy could lead to broader changes in the U.S. automotive retail sector, which generated over $1.3 trillion in sales last year across nearly 17,000 franchised dealers