There was a time when Caravan seemed to be on the verge of ruin, and we cataloged their every move and misstep along the way. However, despite its almost tragic losses, the used car carrier has bounced back, transforming into a company more valuable than any of the “Big Three” automakers in Detroit. And the company’s latest moves have caused waves among dealerships as it quietly entered the new car market, outpacing normal dealer sales in the process.
The reason behind the change to new car dealerships has not yet been publicly stated by Carvana, as multiple outlets have contacted and have not yet received a comment. But CNBC report “The retailer is expected to unveil its plans” at an upcoming media event. Last year or so, found automotive news Carvana has already purchased seven dealerships, all Stellantis-branded dealers, starting with Chrysler Dodge Jeep RAM in Casa Grande, Arizona, its first. Its most recent acquisition is in Avon Lake in the Cleveland area. Each now has its own Carvana-branded homepage.
A look at the Casa Grande store revealed the success of marrying an on-the-ground dealer space with an online retailer. Stellantis sales data shared with dealers and CNBC put the Arizona dealer’s sales at the top in the nation with more than 700 new vehicles sold last month. Before the purchase of Carvana, the dealership was selling an average of 30 to 50 cars per month.
Carvana is just another Stellantis franchise for now
Stellantis, at the moment, is the only brand under the Carvana new car dealership umbrella. But with the success already demonstrated, it’s not unimaginable to believe that other brands will be included in the future, especially if the price is right. An analyst at Stephens Inc. told Automotive News that the Stellantis branding may be due to the availability of dealers and that the cost is much more reasonable to work with.
As far as we can tell, Carvana’s standing among CJDR franchises is similar to that of other dealerships. For example, Carvana locations have kept their CDJR service departments running at their dealerships. So you can theoretically still get your new car serviced at the Carvana dealership where you bought it. However, there are some differences, such as how you buy the car. For Carvana buyers, everything is done online, typically without multiple salespeople involved in the process. Buy a car online, get it delivered to your home, drive it. That is the caravan way. However, these Carvana CDJR stores still offer the in-person experience for new car items, and test drives are still on the menu.
Combining online used car sales with in-person new car sales could change the dealer’s approach. The online retailer’s model and success has attracted the attention and concern of other Stellantis dealers. Sean Hogan, president of the brand’s National Dealer Council, told CNBC that competition is good, and he’s eager to see what Carvana does. “If they’re doing something better than us, we have to adapt, otherwise we’ll become irrelevant.”
