7:48 am, February 26, 2023
Online used car dealer Carvana has posted a fall in quarter four revenues while losses have risen nearly eightfold.
The US-based business, famed for its car-vending machines, saw revenues slump to $2.84bn (circa £2.38bn) in the fourth quarter – down nearly 24 per cent year on year.
Losses, meanwhile, have jumped from $181m (£151m) a year ago to a whopping $1.44bn (£1.21bn).
Shares dropped by five per cent in extended trading this past week.
Carvana said it had dramatically reduced its stock inventory in Q4 by some 27 per cent, with more to come in the current trading quarter.
The firm has committed to reducing its costs by $1bn (£840m) over the next six months.
Full-year results for 2022 did show an improvement, however, with revenues rising by six per cent year on year to $13.6bn (£11.4bn).
Car sales, though, dropped three per cent to 412,296.
Ernie Garcia, founder and CEO of Carvana, said: ‘It has undoubtedly been a challenging time, but like the challenges we have faced before, we are up to the task.’
As in the UK, the online US used car market boomed during Covid lockdowns when Americans were stuck at home.
However, more recently, Carvana – which is now 10 years old – has been struggling to shift cars that it bought at inflated prices in 2022.
Used car prices across the pond have been far more volatile than in the UK over the past year.
Auto Trader recently told Car Dealer that UK car dealers shouldn’t expect to see major price fluctuations affecting the UK used car market like they have in the US.
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