General Motors Co GM-N said it will launch a new, online used vehicle market called CarBravo that will allow the automaker and its dealers to challenge Carvana Co, Carmax Inc and others profiting from selling second-hand vehicles.
GM’s CarBravo site will aggregate vehicles owned by Chevrolet, Buick and GMC dealers, as well as cars and trucks that GM Financial, the automaker’s consumer finance arm, controls after taking them back from rental car agencies or vehicle leases. GM officials said the company’s dealers have about 400,000 used vehicles in stock.
GM said CarBravo will launch to consumers this spring.
Story continues below advertisement
About 40 million used vehicles are sold annually in the United States, more than twice the number of new cars and trucks. Auto manufacturers are largely removed from the profits from those sales, as well as information about customers and the opportunity to sell recurring revenue services such as satellite radio subscriptions.
Online used car marketplaces Carvana, with a market value of $34 billion, filled the ecommerce space left open by automakers and most traditional dealers, offering consumers a way to shop for a wide range of used vehicles from multiple brands, and get their purchase delivered at home. Now, GM is joining auto retail chains such as AutoNation in setting up online used vehicle marketplaces to counter Carvana, whose shares have fallen nearly 50% from their 52-week high.
Steve Carlisle, head of GM’s North American operations, said on Tuesday that CarBravo could outsell Carvana because of the supply of vehicles that GM and its dealers control.
“We think we stack up pretty well against anyone else out there,” Carlisle said.
Story continues below advertisement
Selling used vehicles through CarBravo should allow GM to better control resale prices for rental and formerly leased vehicles it resells, and capture revenue from subscriptions to its Onstar concierge service, satellite radio and other services, Carlisle said.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.