The COVID-19 pandemic brought a seismic shift in how people work, play, and live, and that includes car shopping. Faced with the existential crisis of having no physical customers, dealers began offering remote car-buying services and shipping. Online retailers took off, too, but the party never lasts forever. Vroom, an online used-vehicle retailer, recently announced that it would sunset its e-commerce business, suspending sales on its website.
The company said it would liquidate its current inventory through wholesalers and noted that there would be no new vehicle purchases. Additionally, it’s cutting around 90 percent of its workforce in a bid to cut costs and boost value.
Two Vroom subsidiaries, United Auto Credit Corp and CarStory, will continue operating, and the company noted that the layoffs would not affect people at the two divisions. Vroom CEO Tom Shortt said, “Despite significant efforts to do so, we ultimately were unable to raise the necessary capital in the current market. Obviously, we are very disappointed with this outcome.”
The super-volatile used car market hasn’t been kind to Vroom or any other used-car retailer. Vehicle values have been all over the map, making it exceedingly difficult to purchase and resell cars efficiently and without taking losses. Margins are thin, and now that people can go out and buy cars in person, the virtual model has lost some of its appeal.
[Image: Tada Images via Shutterstock]
Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.
