The Wal-Mart of Used Cars

It hasn't always been a smooth ride--CarMax bled money for its first seven years--but today the company stands as an unlikely American success story: Its supercenters, which now number 71 and are concentrated in the Sun Belt, sold 290,000 used cars in the last fiscal year, ringing up $6.3 billi...

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Bibliographic Details
Published in:Business 2.0 (2001) 2006-09, Vol.7 (8), p.58
Main Author: Myser, Michael
Format: Magazinearticle
Language:English
Subjects:
Automobile industry
Automobile sales
Corporate profiles
Customers
Discount department stores
Financial performance
Inventory
Market shares
Strategic planning
Used automobiles
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Summary:It hasn't always been a smooth ride--CarMax bled money for its first seven years--but today the company stands as an unlikely American success story: Its supercenters, which now number 71 and are concentrated in the Sun Belt, sold 290,000 used cars in the last fiscal year, ringing up $6.3 billion in sales and $148 million in profit. Through a blend of technology and an inspired reimagination of how to treat customers, CarMax has managed to outsmart any credible competitors. Now it has Hummer-size ambitions, with plans to build at least 300 more stores in the next 12 years. When the first CarMax Auto Superstore opened in Richmond, Va., in 1993, it immediately encountered skepticism from insiders and analysts alike. First there was the ambitious size: The lot was stocked with more cars than some dealerships sell in a year. Then there was CarMax's nonnegotiable sticker price and the fact that commissions were flat, so there was no incentive to push the priciest models. That, says CarMax CEO Thomas Folliard, was the most crucial element.
ISSN:1538-1730