Imagine that you could buy a car without having the experience of haggling at a noisy dealership. Ordered your favorite gadget online? Well, that’s the experience that Carvana is bringing to the new vehicle market. They have already transformed used car sales by introducing the car vending machine towers and contactless delivery, and now they are making new car sales more accessible by purchasing traditional franchises and initiating a shake-up in how Americans are buying vehicles.
Among the seven new vehicle dealerships that Carvana has purchased since last year, the focus was mainly on brands from Stellantis like Chrysler Dodge Jeep, and Ram. A notable location in Casa Grande Arizona which was previously attributed to a monthly sale of 30 to 50 vehicles before Carvana took control, is now the Much transformed store enjoying a position of a top-volume dealer of Stellantis in the whole US, selling hundreds of new cars each month. This dramatic change demonstrates the strength of combining Carvana’s digital skills with a physical retail presence.
Carvana is incorporating its popular no-haggle and transparent pricing strategy even in the sale of new cars, This way driving away the stress from the process and making buyers more comfortable. Consumers may view the store around, choose the vehicle specifications they want, and also be delivered the vehicle on the same day or quite rapidly when the markets are provided as examples. This combination of the online side and the ability to handle the manufacturers’ franchises is giving Carvana a very significant advantage. At the same time, it is allowing them better inventory management, trade-ins coming back into their large used car ecosystem, etc.
Many customers perceive it as if a window of opportunity has been opened. For years, the traditional dealerships have been the target of criticism as far as the aggressive sales tactics, hidden fees, and long negotiations are concerned. Carvana’s mode of operating eliminates most, if not all, of those hurdles. Customers are happy to see clear price tags right from the start, virtual tours, and the possibility to do a lot of the paperwork at home. While describing the experience, one very pleased early adopter noted online: “It’s like Amazon for cars, but this time with brand new cars straight from the lot.”
This has also caused other auto retail industry players to reconsider their positions. While some view it as a good thing and welcome it, some established dealers are feeling the pressure because, in part, of the challenge that Carvana’s success poses to long-standing franchise laws and business practices that were initially meant to safeguard physical lots. Carvana has invested more than $160 million to make these acquisitions in different states which is a clear indication of their willingness to put their tech-playbook to work successfully in the new car segment, which is obviously more regulated.
Besides an increase in sales, this approach helps Carvana earnestly focus on its long-term objectives. The company hopes to Much expand its operations and exploit the network it has to be able to handle millions of vehicles per year. These dealership acquisitions will not only increase revenue from new cars but also solidify the entire supply chain for used vehicles as better trade-in opportunities and the remarketing will result from it.
The view of the industry experts is that this move could make the US auto retail landscape change at a pace that has not been seen before. More manufacturers and dealers will be forced to make their digital platforms more attractive to consumers or alternatively they will have to consider teaming up with online platforms. This, for the consumers, is the signal that in the coming days, buying a new car will not only be quicker and more straightforward but also a genuinely enjoyable experience rather than a dreaded task.
