BOGOTÁ, May 17 (Reuters) – Mexican used car platform Kavak has opened a vehicle reconditioning plant in Colombia, which it hopes will help it capture at least 5 percent of the country’s used car market, the head of country Luis Eduardo López.
The 16,900 square meter (20,200 square yard) plant has a capacity to process 2,500 cars per month and was a $2.1 million investment.
Kavak launched sales in Colombia in March 2022 after investing $40 million in the country.
Kavak operates in 10 countries in Latin America and has also entered the Middle East.
“Each month we’ve been growing at double digits compared to the previous month… (Colombia) is one of the top market size levels in Latin America, where around 1.2 million used vehicles are sold every year” , said Lopez.
“We have the ambition to achieve 5% or more of the country’s second-hand vehicle market, in the case of Colombia with current figures that means selling more than 5,000 cars a month in the future,” he added.
According to the executive, more than 90% of used vehicle sales in Colombia are made directly and informally between buyer and seller, without after-sales support.
Kavak currently has a catalog of around 500 vehicles in Colombia.
The platform is valued at about $8.7 billion and is backed by Japan’s SoftBank ( 9984.T ).
In November last year, Kavak made major spending cuts and laid off staff amid a weak macroeconomic environment in Latin America.
No new investment rounds are currently being considered, Lopez said, adding that it will depend on how quickly the company wants to grow.
“Our future plans do not require new capital, but depending on the speed at which we want to advance our growth, we may or may not be able to go to new rounds,” he said.
Reporting by Oliver Griffin Editing by Chris Reese
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