CarMax
Encyclopedia
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
' largest used-car retailer and a Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
company. The first CarMax used car auto superstore was opened in September 1993. In the fiscal year ending February 28, 2009, more than 350,000 cars were sold; as of August 2010 the company has 103 locations.
Concept
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" and was also known as "Honest Rick's Used Cars" to those intimately involved in the skunk works team. The concept was actually first proposed by a consultant hired by Circuit City to evaluate possible business opportunities beyond the scope of their consumer electronics locations.While used cars has always been the main business, CarMax purchased the rights to locations from car manufacturers such as Chrysler, Jeep, Mitsubishi and Toyota. CarMax also purchased an Auto Mall in Kenosha, Wisconsin
Kenosha, Wisconsin
Kenosha is a city and the county seat of Kenosha County in the State of Wisconsin in United States. With a population of 99,218 as of May 2011, Kenosha is the fourth-largest city in Wisconsin. Kenosha is also the fourth-largest city on the western shore of Lake Michigan, following Chicago,...
that had additional manufacturer franchises, such as Ford, BMW and Volvo.
The business model began with no fees. The concept was abandoned after it was determined that customers were not concerned about paying transaction fees for the purchase of a vehicle.
The typical CarMax store is approximately 59000 square feet (5,481.3 m²), 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.
On average, a purchased vehicle has 12 hours of work done to it before being put up for sale. Each car goes through a thorough 125-point inspection process, beyond any state-required inspections, and includes a 30-day warranty and a five-day money back guarantee.
Sales and revenues
The first CarMax used car auto superstore was opened in September 1993, 1.7 miles (2.7 km) from Circuit City's corporate offices in Richmond, VirginiaRichmond, Virginia
Richmond is the capital of the Commonwealth of Virginia, in the United States. It is an independent city and not part of any county. Richmond is the center of the Richmond Metropolitan Statistical Area and the Greater Richmond area...
. As of February 26, 2009, CarMax operated 100 used car superstores and seven new car franchises, all of which are integrated or co-located with its used car superstores.
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 the 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.
During the 12-month period ending February 28, 2009, the company sold 345,465 used cars. CarMax trails Fort Lauderdale, Florida
Fort Lauderdale, Florida
Fort Lauderdale is a city in the U.S. state of Florida, on the Atlantic coast. It is the county seat of Broward County. As of the 2010 census, the city had a population of 165,521. It is a principal city of the South Florida metropolitan area, which was home to 5,564,635 people at the 2010...
-based competitor AutoNation
AutoNation
AutoNation, the largest auto retailer in the USA, was founded in 1996 by entrepreneur H. Wayne Huizenga, also founder of Blockbuster and Waste Management. The company is headquartered in Fort Lauderdale, Florida. The current Chairman and CEO is Mike Jackson, former CEO of Mercedes Benz North America...
Inc. in total car retail sales, but CarMax holds a larger used-car operation.
According to the CarMax fiscal year 2009 report released on April 2, 2009, the company opened 11 used car superstores, including superstores in 5 new markets.
Awards
CarMax has been named "America's Most Admired Company in Automotive Retailing" by FortuneFortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
magazine, It also was on Fortune's "100 Best Companies to Work For" list in 2005 (#87), 2006 (#93), 2007 (#88), 2008 (#46), 2009 (#31), and 2010 (#56).