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CarMax

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Not to be confused with Carfax (company) or Carmex.
CarMax, Inc.
Company typePublic
IndustryNew and used car retailer
FoundedSeptember 1993; 31 years ago (1993-09) (as a subsidiary of Circuit City)
HeadquartersRichmond, Virginia, U.S.
Key people
  • Bill Nash, President & CEO
  • Ed Hill, COO
  • Jim Lyski, CMO
  • Shamim Mohammad, CITO
  • Diane Cafritz, CHRO
  • Enrique Mayor-Mora, CFO
RevenueIncrease US$18.95 billion (FY2021)[1]
Increase US$2.37 billion (FY2021)[2]
Number of employees
c. 27,000+ (2021)[2]
ParentCircuit City (1993–2002)
Websitecarmax.com
CarMax store in Raleigh, North Carolina

CarMax is a used vehicle retailer based in the United States. It operates two business segments: CarMax Sales Operations and CarMax Auto Finance. The corporate entity behind the formation of CarMax was Circuit City Stores, Inc. The first CarMax retail location opened in September 1993 in Richmond, Virginia. As of May 2021, CarMax operates 225 locations.[3]

While CarMax stores focus on marketing used vehicles, the company acquired its first new car franchise with Chrysler Corporation in 1996.[4] By 1999, it added new vehicle franchises for Mitsubishi Motors, Toyota, and Nissan as well.[5] As of early 2021, the only CarMax new vehicle dealerships that remains is a Toyota store located in Kenosha, Wisconsin .[3]

About

CarMax's headquarters is located in Richmond, Virginia. CarMax Auto Finance operates from Kennesaw, Georgia. There are CarMax retail locations in 41 states as well as customer service call-centers (called Customer Experience Centers).[1]

Concept

The concept for CarMax was developed by Circuit City executives under then-CEO Richard L. Sharp. It was developed for nearly a year in 1991, using the code name "Project X", and was also known as "Honest Rick's Used Cars" to those intimately involved in the skunk works team.[6] The concept was actually first proposed by Ronald L. Moore of Richmond, Virginia, a consultant hired by Circuit City to evaluate possible business opportunities beyond the scope of their consumer electronics locations.

Prior to the first store being built, DeVito/Verdi was hired as the advertising agency and creative resource. The company executed the campaign and additional TV advertisements over the course of a number of years in support of the launch and the initial wave of stores.[7]

The business model began with no fees, however the model was subsequently abandoned for the current business model after it was determined that customers were not concerned about paying transaction fees for the purchase of a vehicle.

A typical CarMax store is approximately 59,000 square feet (5,500 m2),[8] carries an inventory of 300–400 vehicles, and turns its inventory over eight to ten times a year. On average, a CarMax location employs 40 sales associates. Each car goes through a thorough 125-point inspection process, beyond any state-required inspections, and includes a 90-day warranty, three days to change the financing for free, and a 30-day money back guarantee.[9]

Circuit City issued the first CarMax stock in February 1997, when CarMax had seven locations. Initially, the stock was a tracking stock still under the umbrella of Circuit City. CarMax officially split from Circuit City as of October 1, 2002, when it was spun off as a stock dividend for Circuit City shareholders, with shares also issued to those holding CarMax tracking stock.[10]

CarMax sold over 750,000 vehicles to consumers in Fiscal Year 2021. [2] According to the CarMax fiscal year 2018 report released on April 24, 2018, the company opened 15 used car superstores in Fiscal Year 2018, and expects to open 15 additional stores in Fiscal Year 2019.[11]

Competition

While CarMax is seen as the nations largest used-car retailer, it is not without competition. With a large shift in customer shopping habits, more online-only companies have worked to eat away are market share in the used vehicle market. To combat this, CarMax unveiled, what it calls, their Omni-channel platform, which is aimed at allowing customer to buy a car online, in-store, or any combination of the two. They also have provided opportunities for customers to choose vehicle delivery at their home, contactless curbside pickup, and more. These offerings directly compete with other home delivery based options such as Carvana, Vroom, Beepi (which is no longer in business), and others.

Recognition

CarMax is listed on the Fortune's "100 Best Companies to Work For" list from 2005 to 2021, placing 36th in 2021.[12]

Other awards include:[13]

  • Fortune Best Workplaces in Retail™
  • Best Workplaces for Diversity™ 2019
  • Training Magazine's - Training Top 125

References

  1. ^ a b "CarMax FY2021 Annual Report" (PDF).
  2. ^ a b c "Car Max Inc. Form 10-K For Fiscal Year Ended February 28, 2021" (PDF).
  3. ^ a b "CarMax Store Locations Nationwide".
  4. ^ "CARMAX'S NEW CARS MAKE WAVES IN ATLANTA". autonews.com. 24 June 1996. Retrieved 29 November 2018.
  5. ^ "CARMAX ADDS MITSUBISHI FRANCHISES TO NEW-CAR OFFERINGS". autonews.com. 9 November 1998. Retrieved 29 November 2018.
  6. ^ Myser, Michael (2 October 2006). "The Wal-Mart of used cars". money.cnn.com. Business 2.0. Archived from the original on 15 May 2007. Retrieved 2019-10-20.
  7. ^ Wernle, Bradford (1998-04-06). "Building desire for Carmax". Advertising Age. Retrieved 2018-03-08.
  8. ^ McWilliams, Jerimiah (26 October 2005). "No-haggle auto giant CarMax to open first store in Hampton Roads". The Virginian-Pilot. Archived from the original on 8 December 2006. Retrieved 8 March 2018.
  9. ^ Openshaw, Jennifer (August 3, 2006). "Buying a new car? Take a trip down the used luxury aisle first". MarketWatch.com. Archived from the original on August 22, 2006. Retrieved May 21, 2016.
  10. ^ "Circuit City to split off CarMax". Orlando Business Journal. Retrieved 2018-01-24.
  11. ^ "CarMax 2018 Annual Report" (PDF).
  12. ^ "100 BEST COMPANIES TO WORK FOR". Retrieved 2021-05-18.
  13. ^ "CarMax Recognition". Retrieved 2021-05-18.
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