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Carmax Swot Analysis

Autor:   •  November 23, 2017  •  1,213 Words (5 Pages)  •  649 Views

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haggle prices that allow customer the ease that they don’t have to go back and forth with negotiations.

With its growth and customer service CarMax has been able to jump to the top of the used car retailing industry. This industry has matured with large number of vehicles and quality conscious consumers. This industry includes car manufactures, whole sealers, auctions, franchised dealerships and independent dealers. With this industry annual sales nearly hit $370 billion, used car sale represent almost half of all auto sales. This industry is expected to reach $480 billion in 2016. CarMax being the largest used car retailer in the US sold 526,929 used vehicles which represents 99% of the total 534,690 used vehicles in 2014 (Carmax,2014).

But for most consumers CarMax is known for the selection of used car and used cars only but at four locations within the company they sale new vehicle. They are partnered with 3 leading car manufactures, which allow them to sale new cars. Giving a new look for CarMax that will grow across the country.


With the threats in any industry in the US growing. So is the auto industries growing CarMax runs into a string of problem every years from the growing pain of overhead cost, the poor economy, competition, and inability to provide 3rd party financing.

With such quick expansion of the CarMax company all over the country comes the pros and cons. The pros are always great but the cons always hit. With every new construction of the new superstores comes a lot of overhead cost. Each store needing new employees, inventory and finances. Another con is growing competition. CarMax mainly selling just used vehicles has put them in their own market other than new car dealerships having such a large pull themselves. Other newcomers to the industries using CarMax a there marketing strategy being Auto Nation and American Car-mart. These companies work the same angle buying and selling used vehicles. The already intense competitions across all business division of the company could force the company to lower their standards and or prices and then in turn impacting the margins.

The US economy over the past 10 years has been a roller coaster for every Industries. But Vehicles sale has taken a huge dip. American not have the extra finances to but new or used vehicle across the country. Also banks and lenders being stricter with their loan cause those American to run from the car buying experience. CarMax provides financing to qualified customers through themselves CAF or CarMax Auto Finance, but a majority of financing done through outside financing and 3rd party financial companies; many of the companies being second chance. If CarMax begins losing the financial company’s and cannot replace them with other companies might find them self without a large number of their customer not being able to get financed.


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