Garcia said the company’s leaders do not know what to expect in light of the economic factors affecting the used vehicle market for industry volume in the near future. He cited a combination of inflationary pressures, rising interest rates and fluctuating consumer confidence as hindering Carvana’s volume growth in the first half of 2022. Demand declined in July as well, he said.
Garcia said that depreciation has made its way into the used vehicle market this year.
“Given that car prices have increased more than other goods and services, it is likely that, in the future, they will depreciate faster on average to return to alignment with their relationships with other goods and services. Will do,” he said.
Carvana’s operating expenses were up $721 million in the second quarter, down slightly from $727 million in the first quarter.
Jenkins said the company experienced quarter-over-quarter growth in logistics spending, a large portion of which went to third-party transportation services, Carvana “to clear some backlog from the logistics network in particularly constrained areas.” “Used. He said he doesn’t expect Carvana to cover logistics costs to nearly that extent in the third quarter.
Carvana continues to integrate ADESA US, the larger physical auction network it purchased from wholesale auction company KAR Global on May 9.
The $2.2 billion Blockbuster transaction was met with mixed reactions when it was announced in February. Some automakers and dealers chose to end business with ADESA US because Carvana is a formidable competitor in the used vehicle sector.
Garcia acknowledged that some ADESA US customers initially reacted negatively to the news and that the auction unit lost some volume as a result. But since then, many customers have returned, he said last week.
“We’ve seen some of the larger commercial accounts start to move more business back to ADESA,” Garcia said.
He did not specify the amount of companies or volumes returned. Caravana officials did not respond to questions Automotive News asking for that information.
Garcia said he believes the access to the 56-site ADESA US network “dramatically simplifies” the company’s logistics and could help cut transportation costs.
“When we buy a car from a customer and we are able to drop it off at a nearby ADESA [location] Instead of running it through our logistics network, we can save a considerable amount of material dollars per transaction, Garcia said.