Carvana Invests $500 Million In New Facilities And Staff

Carvana, the online used car dealership, has invested $500 million to hire new employees and open new facilities, as the company bets on its pandemic-era upswing in sales lasting longer, The Wall Street Journal (WSJ) reported.

Carvana, among other similar retailers, has done well during the pandemic as consumers shifted toward digital methods of buying, according to WSJ.

Carvana has operated online since its first sold car eight years ago, with sales numbering 244,111 in 2020. That, according to WSJ, is contrary to the experiences of other dealers, which saw registrations decline 7 percent in 2020 to 37.2 million compared to 2019.

Carvana Chief Financial Officer Mark Jenkins told WSJ the company is confident in its chances going forward, adding “the customer preference shift toward more comfort buying online [is] something we think will be here to stay.”

Carvana plans to build 10 new inspection and reconditioning centers, which refers to the locations handling the repairs and photographing of vehicles, WSJ reported.

Last year, the company spent $360 million on capital projects, with half of that going toward four new reconditioning centers. WSJ reported that the company plans to hire around 5,000 new employees. It has around 10,400 part-time and full-time employees. The investments will help with the rising demand, including solving some of the inefficiencies the company experienced during the pandemic last year, such as temporary staffing shortages due to COVID-19 infections.

Last month Carvana set sales records for the fourth quarter but also has posted a larger-than-usual loss due to rapid expansion and trying to keep up with demand.

In addition to its new inspection and reconditioning centers, Carvana added two vending machine facilities and five new retail markets. The company’s longstanding goal has been to sell 2 million vehicles per year.

“We will continue to expand in 2021 and expect to serve 78 [percent] to 80 percent of the U.S. population in more than 300 markets by year end,” Jenkins said at the time.

Source: Carvana Invests $500 Million In New Facilities And Staff