© Reuters. FILE PHOTO: A photo of the facade of used car platform Kavak in Mexico City, Mexico, August 25, 2020. PHOTOGRAPH BY AUGUST 25, REUTERS/Edgard Garrido
BOGOTA (Reuters) – Mexican platform Cavac has opened a car restoration plant in Colombia that it hopes will help capture at least 5 percent of the country’s used car market, Luis Eduardo Lopez, director of the Mexican used car company, said on Wednesday.
The plant has an area of 16,900 square meters (20,200 sq yd) that has the capacity to process 2,500 vehicles per month and has seen an investment of $2.1 million. 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.
“Every month we’ve been growing by double digits compared to the previous month… (Colombia) is one of the major market levels by volume in Latin America with about 1.2 million used cars sold each year,” Lopez said.
He added, “We have an ambition to have 5% or more of the used car market in the country, in the case of Colombia in current numbers that means more than 5,000 cars sold per month in the future.”
According to the executive, more than 90% of used car sales in Colombia are carried out directly and informally between the buyer and the seller, without after-sales support.
Kavak currently has a catalog of about 500 vehicles in Colombia.
The platform is worth about $8.7 billion and is backed by Japan’s SoftBank.
In November last year, Kavac made deep spending cuts and layoffs amid a weak macroeconomic environment in Latin America.
New investment rounds are not currently under consideration, Lopez said, adding that it will depend on how fast the company wants to grow.
“Our future plans do not require fresh capital, but depending on how fast we want to go with our growth, we may or may not be able to go on new rounds,” he said.