Carvana has officially entered the new-vehicle sales market with the acquisition of a franchised dealership in Arizona, a major shift for the online retailer known for selling only used cars since its founding in 2013.
On February 28, Carvana completed the purchase of Jerry Seiner Chrysler-Dodge-Jeep-Ram in Casa Grande, Arizona, located about 45 miles south of its headquarters in Tempe. The company confirmed the deal to Automotive News but did not disclose the purchase price. The dealership will be rebranded as Casa Grande Chrysler-Dodge-Jeep-Ram and is set to reopen under Carvana’s ownership on March 3, retaining all 41 employees.
The transaction marks a strategic departure from Carvana’s traditional business model, signaling potential expansion into new car sales. The company has faced financial and operational challenges in recent years, navigating industry fluctuations and a volatile used car market.
Carvana’s move draws comparisons to competitor CarMax, the nation’s largest used-vehicle retailer, which previously operated new-car franchises. CarMax’s incursion into new car sales began in the mid-1990s when it secured a Chrysler franchise, a move that initially disrupted the traditional dealership model. However, the company later shifted its focus entirely to used car sales, discontinuing its new-vehicle dealerships in 2021.
However, Carvana’s acquisition raises questions about whether the company intends to expand further into the franchised dealership model or if this remains a singular test. The success of this venture could determine whether Carvana redefines its business strategy or continues to focus primarily on its online used-car marketplace.
