CarMax
From Wikipedia, the free encyclopedia
| CarMax, Inc. | |
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| Type of Company | Public (NYSE: KMX) |
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| Founded | 1993 |
| Headquarters | Richmond, Virginia, USA |
| Key people | Thomas J. Folliard CEO , Richard L. Sharp, Chairman, Keith Browning, CFO |
| Industry | New and used car retailer |
| Revenue | $5.26 billion USD |
| Employees | ~12,000 (2005) |
| Slogan | The Way Car Buying Should Be |
| Website | carmax.com |
CarMax is the United States' largest used-car retailer. CarMax is a Fortune 500 company and has been named "America's Most Admired Company in Automotive Retailing" by Fortune Magazine, as well as having been placed on Fortune's "100 Best Companies to Work For" list in 2005 and 2006.[1] During a twelve month period ending on August 31, 2006, the company retailed 311,241 used cars, which is 94 percent of the total 330,296 vehicles retailed by the firm in the US during that time.[2] CarMax trails Fort Lauderdale, Florida-based competitor AutoNation Inc. in total car retail sales, but CarMax holds a larger used-car operation.[3]
The concept for CarMax was developed by Circuit City executives under then-CEO Richard L. Sharp for nearly a year in 1991 using the code name "Project X".[4] The special project was developed when Circuit City began searching for business opportunities beyond the scope of their consumer electronics locations.[5] The first CarMax used car auto superstore was opened in September 1993, 1.7 miles from Circuit City's corporate offices in Richmond, Virginia. On October 1, 2002 CarMax completed its official separation from Circuit City, becoming a separate, publicly traded company.[6]
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[edit] Locations
As of October 1, 2006, CarMax operated 71 used car superstores and 7 new car franchises, all of which are integrated or co-located with its used car superstores.[7]
The typical CarMax store is approximately 59,000 square feet,[3] carrying an inventory of 300 to 400 vehicles, and turns its inventory over eight to ten times a year.[5] On average, a CarMax location will employ 40 sales associates.[3] According to the CarMax Fiscal 2007 Expectations released on September 20, 2006, the company plans to open 2 standard locations as well as 4 satellite superstores in the remainder of the 2007 fiscal year.[8] New locations are set to include:
- Burbank, Los Angeles County, California
- Fredericksburg, Virginia
- Charlottesville, Virginia
- Fresno, California
- New Haven, Connecticut
- Austin, Texas
[edit] Business
More than half of the inventory is purchased directly from private owners, many as trade-ins, while the remainder comes from public auctions. CarMax maintains a company-wide database of pricing information which gives the company’s 600 car buyers very specific guidelines on how much to pay for any make or model. They know what the resale price is likely to be and how long it will take to sell, which allows CarMax to manage its inventory turnover rate.[5]
CarMax will not resell cars that have frame damage or have been burned or flooded.[9] They do sell cars that have been in accidents, but only accidents that do not result in damage to the structural integrity of the vehicle. Every car goes through a 125-point inspection,[3] and averages over 12 hours of reconditioning before being moved to the lot. Each car gets a 30-day warranty and a five-day free return policy.[9]
Each car is fitted with an RFID tag to track how long it sits on the lot and when a test-drive occurs. Showroom computers give customers access to CarMax's nationwide catalog of 20,000 cars, allowing customers to have a car from a different location transferred to them for a fee which can be applied towards the purchase price of the car.[4]
CarMax operates the CarMax Foundation, which the company established in 2003. Through the CarMax Foundation, the company donates to various charities and causes in communities surrounding its locations through donations & grants, service projects and matching gifts. In the company's Fiscal Year 2006, over $1 million was donated to various charitable causes. CarMax also uses its Grand Opening events to host charitable causes. Each Grand Opening event includes at least one charitable event, such as a CarMax Road Rally where local celebrities compete for donations to their favorite charities, or simply a donation to a local food bank to provide holiday meals for low-income families. Local organizations, such as food banks, animal shelters, and Boys and Girls Club have benefited from donations during CarMax Grand Openings.[10]
