“That’s pretty good coverage if you compare us to Carvana, CarMax or the like,” Carlisle said. automotive news.
Cox Automotive estimates that half of all used retail sales, or about 10.6 million vehicles, were sold by franchised dealers last year. GM intends to list up to 80,000 vehicles on CarBravo this year, spokesman Sabin Blake said.
During CarMax’s fiscal year that ended in February, the largest used vehicle retailer sold 924,338 vehicles at retail. Carvana sold 425,237 vehicles in 2021 and Vroom sold 74,698 last year.
“If you think about some of the competitors, one of their big challenges might be getting good used cars,” Carlisle said in an interview on April 29. “In today’s world, a lot of that is leaking out of our system between us and our distributors.”
GM’s business is much broader than selling used vehicles. The automaker is likely to absorb some of the market without hurting existing retailers much, said David Whiston, US auto stock strategist at Morningstar.
“There’s room for a lot of players,” Whiston said. “If you’re willing to make the investment in IT, you can certainly succeed.”
Customers will shop through GM’s digital retail platform, which allows them to complete much of their shopping online, but also connects them with a dealer.
“If you’re buying through an OEM for used cars, it’s a bit of a fragmented experience. You go from dealer to dealer,” Carlisle said. “What we can do is bring all of that together into one experience from a consumer perspective and do it in a way that benefits not only consumers but dealers as well, because they have access to more inventory and better tools than they would if they’re doing it alone.”
Over time, GM plans to sell software and subscriptions to used-vehicle buyers as it aims to double revenue to $280 billion by 2030 from its five-year average of $140 billion. He expects software and other new businesses to grow nearly 50 percent a year through the end of the decade.
CarBravo “gives us another connection point from a consumer standpoint,” Carlisle said.
The automaker can market OnStar and OnStar Insurance, for example, to buyers of GM and non-GM used vehicles through CarBravo. Eventually, when vehicles in the used fleet have the technology to enable GM’s Super Cruise driver assistance system, GM will be able to offer that feature to customers, along with the wireless updates that come with it.
“It’s increasingly positive because it’s asset-light income, in the sense that the vehicles are already built,” Whiston said.
“It’s likely to be a much higher-margin revenue stream than just selling the vehicle.”
New and used vehicle retailers are facing inventory pressure due to global microchip shortages and other supply constraints. That, at least in the short term, could hurt CarBravo’s success, said Daniel Imbro, a retail analyst at Stephens.
“It’s going to depend on how many dealers opt for it,” he said. “A critical mass will be needed because liquidity is the most important thing that will drive volume in the long run.”
Carlisle acknowledged the challenge of launching CarBravo amid a used-vehicle shortage, but said GM will consider inventory levels as it builds regional distribution centers “so there’s added value for the dealer and then for the consumer.”
As a manufacturer of new vehicles, GM is well positioned to collect the most eligible used inventory available, he said.
“We have priority access to the cream of the crop,” Carlisle said. “It all adds up to a really compelling opportunity.”
CJ Moore contributed to this report.