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‘Car Vending Machine’ Company Expands Into Twin Cities

Carvana Will Locate to Site in Minneapolis’ Midway District
July 31, 2018
Carvana's new automobile "vending machine" in Cleveland, OH, which opened earlier this month.

Minneapolis is the latest target of a quick-growing tech company that is shaking up the auto retail industry.

Carvana, based in Tempe, AZ, has asked the city of Minneapolis for a zoning change to allow for a temporary car storage facility on a 5.5-acre property at 1300 New Brighton Blvd., a semi-circular swath of land tucked up next to Interstate 35W in the city’s Midway industrial area. The site was last occupied by a branch of Kansas City, MO-based Arrow Truck Sales, a dealership that specializes in semi-tractor trailers.

Carvana is a three-year-old technology company that allows customers to shop, finance, and trade in used cars through its website. Unlike its older competitor, Carmax, a customer can complete the entire transaction online.

After the deal is sealed, buyers can have their new car directly delivered to them or can pick the car up at one of Carvana’s "car vending machines," neon-gilded glass towers that will spit the car out with entry of the buyer’s token. If buyers don’t live in a market with a vending machine but wish to experience one, Carvana will kick in $200 to pay for a flight to a city that does and provide "white glove transportation" to the site as well.

Carvana declined to comment on what exactly it may have in store for Minneapolis-St. Paul, and the owner of the site, Richard Eitel, hung up when contacted. The company will use the site at 1300 New Brighton only for storing cars prior to delivery, according to city materials. Plans for the site do not include a vending machine.

The company is in the midst of an aggressive push to turn itself into a car sales player with a national presence, and clocked triple digit growth in sales, revenue and gross profit during its most recent quarter, which led the investment blog Seeking Alpha to speculate that it could become the "Amazon of car buying".

As of mid-July, Carvana was selling cars in 70 cities, which put it within range of 45 percent of the U.S. population, and had vending machines in 13 markets. By the end of its current fiscal year, Carvana will have debuted in 35 to 40 new markets, with a presence in 79 to 84 metro areas in all, according to a May 9 letter to the company’s shareholders.

Clare Kennedy, Minneapolis / St. Paul Market Reporter  CoStar Group   
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