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Case
| HBS Case Collection
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2013
(Revised from original 2013 version)
CarMax: Disrupting the Used Car Market
by
John R. Wells and Galen Danskin
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Abstract
In 2012, CarMax was the leading retailer of second hand cars in the United States and a fast-growing competitor in the used car auction market. After their founding in 1993 by Circuit City's management, CarMax had grown rapidly. They had been profitable since 2000 and independent from their parent company since 2002. While Circuit City went bankrupt in 2009 under pressure from Best Buy and challenging economic conditions, CarMax flourished and expanded through the economic crisis. Fiscal 2012 revenue reached $10.5 billion and net income, a record $413 million. However, CarMax still only accounted for less than 3% of the fragmented second hand car market. Additionally, they were keen to avoid the fate of their parent and to stay ahead of copy-cat competitors. What should CarMax do to grow its market position and continue its success in used car retailing and auctioning?
Citation:
Wells, John R., and Galen Danskin. "CarMax: Disrupting the Used Car Market." Harvard Business School Case 713-467, March 2013. (Revised from original January 2013 version.)