Shopping for a used-car is challenging these days. Not only is there a reported shortage of used-cars, but prices have been steadily rising at an estimated rate of 35%, making it hard for consumers to shop for a good used-car at a good price. In addition, there has been an increase in the number of ways – and websites – to shop for a used-car.
To access this rising demand, and to help resell its hundreds of thousands of used-cars, General Motors recently announced a new digital platform named ‘CarBravo’ that will be focused on selling its own used-car inventory.
GM officials stated that there are roughly 400,000 used vehicles available on an ongoing basis and its dealers sell 2.5 million used cars each year. Plus, GM and GM Financial have another 500,000 used cars each year to add to the mix.
According to industry analyst research, the U.S. used car market is more than two times the size of the new car sales. McKinsey estimates that U.S. consumers buy more than 39.4 million used cars each year, at a value of $1.4 billion. And used car sales are growing at a faster rate than new car sales, leading to an expanded market opportunity.
The biggest used car dealers currently are Carvana, CarMax, and Cars.com – all of which use their websites and locations to attract buyers and make it easy to both sell and purchase a used car. Plus, Ford has already entered into the consolidated used car market with its Ford Blue Advantage site.
CarBravo will offer online only purchase, dealership only purchase, and a combination of the two methods. However, one of GM’s biggest strength may be its reach – it has a network of 4,200 dealers across the nation, and those dealers have 400,000 used vehicles in inventory each year.
Where would you shop for a used car?
Group Activities and Discussion Questions:
- Poll students: Who has sold a car? Who has bought a used car? What was their experience?
- List the places that used cars can be purchased. Who are the direct competitors to GM? Indirect competitors?
- Show video discussing the used car market: https://youtu.be/OMHhOdQRXZM
- Discuss the purpose of GM’s new business – CarBravo.
- Ask students to develop a SWOT analysis for General Motors, focusing on opportunities and threats. What are the main risks and issues?
- Divide students into teams. Have each team compare CarBravo with a competitor.
- What are the points of difference?
Source: Brown, L. S. (January 12, 2022). Car and Driver. GM to launch CarBravo, its own used car sales website.; LaReau, J. (January 11, 2022). Detroit Free Press. GM launches massive used car website CarBravo, hopes to take on Carvana.