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BREAKING news! Carvana & Vroom is bleeding cash. Is Ecommerce in auto DOA?

Discussion in 'Other Cool Technologies & Services' started by joe.pistell, Mar 7, 2018.

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  1. Eric88

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    Whether or not specifically Carvana "makes it", I believe that they're the biggest force currently training customers to expect 100% of the car-buying experience online. Maybe Carvana will fold under their own specific challenges, but if they do, they're leaving a gap that auto dealers can eventually fill with a decent turn-key, online-only sales program.
     
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  3. Jeff Kershner

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  4. DrewAment

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    The most in your face and truthful statement. They are a CAR DEALER with clever marketing (used car coin machine). Any other car dealer would be out of business by now if ran the same way as them.
     
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  5. Cullen C

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    Agree most(all) other dealers operating this way would be out of business without the support of the public markets. Totally disagree that they are a “low tech” dealer. While they are not purely a technology company, they are the most technologically advanced dealer in the country, that’s not an opinion.
     
  6. hondadealer

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    It is simple math. According their most recent operating results they increased their total gross profit including F&I to $2408 per vehicle. Assumedly they are paying for reconditioning at cost, not retail, so no lift in the fixed ops departments. Nonetheless, not great but respectable given their model and the fact that they are sourcing the vast majority (86%) of their vehicles from auction.

    Their problem is on the expense side. They lost $82.6M on sales of 36,766 units or $2246 per car. Explain to me again how increasing volume will fix this? So, they would need to improve gross profit per vehicle to $4850 per car to break even. That ain't happening.

    There is nothing proprietary about what they are doing and they have a lot less brand cachet than Tesla. At best they will be fondly remembered for driving the push towards online purchasing of used vehicles. Nonetheless, investors will soon grow weary of pouring cash into this tire fire.
     
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