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Carvana's Sales Drop for the First Time in Nine Years, Resulting in Massive Losses.

Last year was a difficult year for Carvana, the popular online used-car seller. For the first time in nine years, the company sold fewer cars than in the previous year, resulting in losses of $1.6 billion. The auto industry supply chain problems caused by the pandemic led to a shortage of new cars, which led to an increase in the price of used cars. Carvana was not prepared for this market drop, which was exacerbated by rapidly rising interest rates, making it more difficult for the company to sell cars. However, the company's CEO, Ernie Garcia III, said that the difficult transition the company had gone through in the past year would lead to a more efficient company in the future.

Carvana is the second largest used-car retailer in America after CarMax. The company's losses ballooned to $806 million in 2022, and the number of cars sold in the fourth quarter of last year dropped 23% from a year earlier to about 87,000, while overall revenue declined 24%. The company has been aggressively reducing its inventories, cutting the number of vehicles held in inventory by 27% in the fourth quarter. Despite these efforts, the reductions in expenses related to selling cars have not yet been visible in per-vehicle profits.

Carvana's executives have been working to reduce expenses related to selling cars, including reducing advertising spending. However, as the number of cars sold has dropped, the reductions have not yet been visible in per-vehicle profits. As the company works toward profitability, Chief Financial Officer Mark Jenkins said that the company had $3.9 billion in cash, available real estate, and other liquid assets available to draw on. The company's CEO, Ernie Garcia III, said that the results of the company's efficiency would show up "in the not too distant future" as used car sales rebound.

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