The current microchip shortage that is wreaking havoc in the industry forced various car makers to look for alternatives. Customers want new cars now, not six or ten months later, after placing an order. Therefore, pre-owned models are starting to become a hot commodity right now, prompting everyone to adapt. The latest to try and max out on this new business model is GM, the car maker announcing plans to launch an online platform for used cars, dubbed CarBravo.
According to General Motors, the new website will allow it and its dealers to offer customers pre-owned models from its brands, like Chevrolet, Buick and GMC. Furthermore, customers will also be able to purchase financing via GM Financial, if they need help securing funds for their dream car. Once online, this new venture will become a rival for other platforms such as Carvana, Carmax and others.
At first, CarBravo will apparently rely on some 400,000 cars being available right away, part of the stocks dealers and rental companies had and are putting up for sale. Considering about 40 million pre-owned cars are changing hands in the US every year, the prospects are good for GM, especially since car makers are traditionally left out of the profits in these cases.
“CarBravo will give customers more choice and access to shop significantly expanded inventories of both the dealer and a national central stock of GM used vehicles. Importantly, the program features will also be offered on non-GM used vehicles,” Carlisle said in a statement, “CarBravo is designed to provide customers the convenience to shop how they want, where they want – online, at the dealership or both.”
Marketplaces for used cars on the internet like Carvana, which has a market capitalization of $34 billion, fill the online gap left by automakers and most traditional dealers by allowing customers to search for a variety of used vehicles from numerous brands and have them delivered to their home. To challenge Carvana, GM is teaming up with car retail chains like AutoNation to launch CarBravo. Carvana’s stock value reacted immediately after the announcement, dropping over 50% from its 52-week high. The service is expected to become operational this spring.