Kairana sales slowed in year of digital car retailing

An epidemic that tried to give digital shopping to more Americans would surely benefit online used vehicle retailer Kairana?

The reality is much more nuanced than that given by CEO Ernie Garcia during this week’s installment of Automotive News ‘Congress Convergence’.

Garcia said there was a spurt in behavioral change in the last 11 months before dealers moved into digital retail.

“But I think in many ways the visibility and awareness of the changes that have been made have changed the behavior itself,” he said. “There is now such awareness in digital retail’s automotive.”

However, for Kairana, the sales boom has not been equaled – relatively speaking. Garcia said the company had more than doubled its sales by 2020, yearly.

“From our point of view, if we weren’t for the epidemic last year, we would have grown faster.”

The retailer’s net sales grew 37 percent in 2020 to 244,111.

Caravana pulled back its operations over the early spread of coronovirus in the spring of 2020, and had difficulty improving its recurrence capacity throughout the epidemic. As a result, it did not have enough ready-to-sell cars and trucks on its website for sale, Garcia said.

Recently, Caravana has been able to increase production of ready-to-use vehicles. But the tax refund season and government incentives have effectively curbed the already high demand flames.

“If you look at our inventory levels, it seems like we haven’t made any progress, but we are increasing our sales very fast,” Garcia said. “So we have had to develop our underlying production capacity to keep our inventories at a level lower than the same pace of sales, and our hope is that in the relatively near future, we will start to grow our sales and be able to where we Wanted to be there, to build the inventory there. “

A conversation with Garcia also revealed how the caravan differentiates itself from franchise dealers – many of whom are now offering digital and remote sales.

Garcia said that Caravan is trying to give customers a “really simple checkout flow” and that buyers are not physically adjacent to cars, creating a completely different supply chain from traditional vehicle retailers.

Garcia said customer preferences for experience such as a caravan broadly select the price, being able to quickly order and get a vehicle.

“And hopefully this will be a good strategy for us,” he said. “And the dealers will probably do many different things and try all kinds of different ways, looking at their different starting points, their different assets and their different customers, because I think there There is a wide distribution of customers’ preferences. “

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