The End of Vroom - Used-vehicle retailer Vroom to cease e-commerce operations

[huunvubu]

Used-vehicle retailer Vroom to cease e-commerce operations

https://www.autonews.com/used-cars/used-vehicle-retailer-vroom-halt-operations-sell-inventory

Online used-vehicle retailer Vroom Inc. said Monday it plans to wind down its e-commerce operations, citing a need to preserve liquidity.

The company will suspend used-vehicle transactions through vroom.com, according to a news release. Vroom also intends to sell its current used-vehicle inventory through wholesale channels, halt purchases of additional vehicles and reduce its work force by 800 employees – or 90 percent – as part of a “value maximization” plan its board of directors approved Jan. 19, according to a regulatory filing.

Vroom shares plunged 51 percent to $0.25 in after-hours trading.

Vroom, the once-mighty Carvana competitor, will wind down its used-car business

https://www.marketwatch.com/story/t...ounced-it-is-winding-down-operations-d7359296

Vroom was valued at $2.5 billion at its 2020 IPO


Vroom Inc., once valued at a heady $2.5 billion, said Monday it is winding down its online used-car sales business in order to preserve liquidity, as its market cap has dwindled to less than $100 million.

Vroom VRM, +20.28% said it would focus on growing its two remaining businesses, an auto finance company and another offering analytics and digital services for auto retail.

Shares of Vroom fell more than 50% in the extended session Monday. The demise of its online used-car business didn’t appear to impact shares of competitor Carvana Co. CVNA, +7.64% or used-car seller CarMax Inc. KMX, +1.46%, both of which were flat in the after-hours session.

Vroom debuted on equity markets in June 2020, three years after Carvana’s IPO and stoking hopes about online car buying amid pandemic constraints.
Carvana ran into its own troubles, however, striking a deal with bond-holders last year to boost liquidity.

Online car buying may be attractive to those looking to skip interactions with car salespeople, casting a wider net for a vehicle, or just enjoying the convenience of online shopping.

The business, however, has proven to be cash-intensive. By the end of 2021, Carvana was riding a continued wave of demand for used cars but bemoaning “significant operational constraints” that came with the surge, both in buying more cars to boost its inventories and in selling them — more last-mile pickups, more customer-care interactions, and more complex title-processing and registration requirements, for example.

Vroom said Monday that under the board-approved “value maximization plan,” Vroom.com transactions are halted and the company plans to sell its current inventory to wholesale businesses.
Vroom also stopped buying additional vehicles and it was “executing a reduction-in-force commensurate with its reduced operations.”

I suspected something was wrong with Vroom as their quote for my MY2023 Maverick XLT Hybrid was always $6,000 or more lower than Carvana. Normally they would be only about $1,000 less.

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[sundog]

Really though, Vroom and Carvana . are/were competing against the dealership used car business, using technology to put more power and money in the hands of consumers. Probably more about the high interest rates combined with lower used car value than a lack of interest in an easier way to sell your car than have it used as a bargaining chip for a new car purchase. Will be interesting to see the postmortem and what happens with Carvana and the online used car buying/selling model.

 

[1929]

Vroom is not going out of business. UACC and Carstory remain solvent.

 

[huunvubu]

Vroom is not going out of business. UACC and Carstory remain solvent.

They are going out of business in the used car buying/selling.

Yes they will retain UACC and Carstory but that is only a small shell of what they were.

Vroom was valued at $2.5 billion at its 2020 IPO


Vroom Inc., once valued at a heady $2.5 billion, said Monday it is winding down its online used-car sales business in order to preserve liquidity, as its market cap has dwindled to less than $100 million.

 

[OB1e]

My local CarMax has a 22 XLT hybrid no lux 33k miles for $31k. Whoever sold it to them clicked their heels out the door. This truck will never sell, and if it does I guarantee CarMax will be eating a loss. How CarMax/carvana is still around is baffling. Vroom is just the beginning.

 

[Bob The Builder]

Selling their inventory through wholesale channels. That's gonna take a bite off the bottom line.

 

[Johnkn]

I'm glad I sold my 13k mile 2022 Hybrid/LUX XLT to Vroom last July for $2000 more (even including all new taxes, tags and doc fees....) than I paid for my absolutely identical replacement 2023 truck. Vroom offered much more than any other buying service.


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