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Kavak, which calls itself the largest pre-owned car operation in
the world, will enter Colombia, Chile and Peru with a planned
investment of $120 million. The company has earmarked $60
million for its expansion to Istanbul, Turkey, Chief Executive
Officer Carlos Garcia said.
"Turkey is a $120 billion market, so it's a huge opportunity,"
Garcia said in an interview with Reuters. "They face similar
problems that we face in Mexico and Brazil," he added, referring
to fraud in used-car sales and difficult access to financing.
The SoftBank-backed startup is valued at $8.7 billion, according
to Garcia, and has experienced rapid growth in its native
Mexico, which accounts for 60% of its operations. Kavak also
operates in Argentina and Brazil.
That scale-up, however, hasn't come without speed bumps. Kavak
cut an estimated 150 jobs from its Sao Paulo and Rio de Janeiro
operations last month, less than a year after expanding to
Brazil, a result of investing ahead of growth and needing to
adjust to changing market conditions, Garcia said.
Garcia added that Kavak is not currently expecting "massive
layoffs."
The company has also faced highly-publicized social media
complaints about its customer service in Mexico.
Garcia attributed some of that to backlogs created by pandemic
shutdowns of government offices, delaying the necessary
paperwork around used-car sales.
"We have a group of users that we definitely could serve
better," Garcia said.
"What I like to ask my users is what happens if Kavak doesn't
exist?" he added, citing the informality of the used-car market.
(Reporting by Cassandra Garrison; Editing by Josie Kao)
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