DETROIT, March 3 (Reuters) - General Motors is restructuring how its U.S. dealers sell used vehicles, a bid to compete better with fast-rising online sellers like Carvana.
The Detroit-based automaker said on Tuesday it is dissolving a long-standing program that helps its dealerships sell used cars with GM-backed warranties. Instead, it is asking retailers to move their pre-owned-vehicle operations under GM’s CarBravo brand, a national, online site it launched in 2023.
Starting in June, Chevrolet, Buick
and GMC dealers must sign on to CarBravo to sell used GM vehicles with factory-backed warranties, the automaker said on Tuesday. Its fourth brand, the luxury Cadillac line, will continue to use GM’s traditional certified-pre-owned program.
GM says the move will increase the number of used cars that flow through its dealership network by adding non-GM models and older vehicles – even 15-year-old cars could be backed by a warranty under the new system. Today, the company’s certified-pre-owned programs only include GM vehicles, and typically cover cars of up to five years in age.
The U.S. car business is grappling with an affordability problem, with average prices rising faster than inflation during this decade, and that has fueled booming used-car demand. About 40 million used vehicles are sold annually in the United States, compared to around 16 million new vehicles sold annually in the past few years.
For GM and other car manufacturers, used vehicles help generate new-vehicle sales by driving store traffic and allowing buyers to trade in their car for a new one.
“We know these customers that buy certified used vehicles, the propensity for them to come back and buy a new vehicle just increases,” said John Fitzpatrick, CarBravo program leader.
The emergence of Carvana, which sells cars online and delivers them without the use of a dealership, ramped up competition across the industry, said Jeremy Robb, chief economist at data provider Cox Automotive.
Carvana, which launched in 2013, reported sales of 596,641 vehicles last year. GM’s CarBravo service has sold around 216,000 cars since it began in 2023.
GM said CarBravo is selling cars at a faster rate than its broader certified-pre-owned program, even though fewer than one-quarter of its 3,500 U.S. dealerships sell their cars through CarBravo.
Andy Guelcher, president of Mohawk Chevrolet in upstate New York, said using the online selling tool has helped grow his used car sales by 52% over the past two years. “I'm talking to people that I've never spoken to before,” he said.
(Reporting by Kalea Hall in Detroit; Editing by Mike Colias and Andrea Ricci )
