Specialist
Former director at Vroom Inc
Agenda
- Trends and developments in the online used vehicle industry
- Competitive positioning – Vroom (NASDAQ: VRM), Carvana (NYSE: CVNA), CarMax (NYSE: KMX) and Shift Technologies (NASDAQ: SFT)
- Volume and GPU (gross profit per unit) outlook amid downmarket expansion efforts through United Auto Credit acquisition
- Medium-to-long-term outlook
Questions
1.
Could you share 2-3 key trends or developments you’ve been following in the online used vehicle industry?
2.
You referenced the exponential growth in wholesale, but potentially expect that to change very soon. What has been driving that exponential demand in the past six months and what is your outlook for how that evolves?
3.
The other trend you referenced was the shift to digital. Experts in previous Forum Interviews [see CarMax – Omnichannel Strategy & Demand Outlook – 29 November 2021] have stated that only a small percentage of cars are being sold online and people want to have physical interactions with a car before purchasing. Are you noticing that trend differently? You have discussed this exponential switch to online growth and online purchasing. How do you expect that to play out? What are the barriers to that now and how might the amount of cars sold online vs in-lot change over the next 3-5 years?
4.
Could you outline the competitive landscape and Vroom’s positioning?
5.
What have you noticed from Carvana in the past six months and what are you expecting over the next three months? What are your pros and cons for the company?
6.
You’ve placed CarMax at number three for the online space. It seems it’s been developing its omnichannel capabilities more slowly than expected or desired. What do you think of its omnichannel developments and what capability gaps are needed to close on par with Vroom and Carvana for online sales?
7.
Is there any scenario in the next five years where you think either Vroom or Shift can achieve parity with Carvana in sales or market share, and do you think e-commerce in this industry is overall a winner-takes-all industry?
8.
What do you think of the potential for omni-initiatives from traditional dealers? We’ve had initiatives from Driveway and Lithia. Do you consider that as a formidable competitor? What are pros and cons of the Driveway platform?
9.
What is the pricing positioning among the three market leaders – CarMax, Carvana and Vroom? How are they thinking about pricing today, who has pricing power and how are they positioning themselves?
10.
You referenced the OEM [original equipment manufacturer] positioning in the sector. What is their willingness or ability to pursue the more D2C approach and over what time frame could that occur? General Motors introduced CarBravo, which is a shop for used vehicles. What impact will that have on the industry and what are your expectations for how OEMs might position themselves?
11.
What are your volume expectations for Vroom through the rest of 2022 and into 2023? What factors could push it either way?
12.
How is Vroom leveraging the salvage auctions to manage low-value inventory?
13.
How is Vroom thinking about sourcing cars in this limited inventory environment and how do its capabilities in sourcing cars compare to competitors?
14.
Can you share your thoughts on Vroom’s recent United Auto Credit acquisition and the rationale there?
15.
Can you explain how the United Auto Credit acquisition better positions Vroom to serve the customer? Is there a situation where it might have left sales or units on the table due to lack of internal loan capability?
16.
What are your M&A expectations for the industry or Vroom specifically? Are there any obvious or attractive targets for it to consider bringing into the fold?
17.
What is the best- and worst-case scenario for Vroom over the next 12-18 months?
