CarMax 2004 Annual Report Download - page 6

HUGE
■With annual sales of approximately $366 billion, used
vehicles comprise nearly half of the U.S. auto retail
market, the largest retail segment of the economy.
■In 2003, there were an estimated 43.6 million used
vehicles sold compared with 16.7 million new vehicles.
■CarMax’s primary focus — 1- to 6-year-old vehicles — is
a market estimated at $265 billion in annual sales and
20 million units per year.
■The used vehicle market is substantially bigger than other
large retail categories such as the school and office
products market ($229 billion in estimated annual sales)
and the home improvement market ($212 billion in
estimated annual sales).
STABLE
■Only twice in the last two decades has the volume of
used unit sales fluctuated by more than 3% from one
year to the next, far less volatile than the annual change
in new car units sold.
■The market for late-model used cars is almost acyclical.
As the economy improves, buyers who move from used
cars to new cars are replaced by buyers who can now
afford a later model used car.
■This stability provides the foundation for CarMax’s
market share growth strategy in both existing and
new markets.
COMPELLING MARKET
4 CARMAX 2004
3
1
-15
-10
-5
0
5
10
15
% Change Used Vehicle Unit Sales % Change New Vehicle Unit Sales
2003200119991997199519931991198919871985
USED VEHICLE SALES STABILITY
(Percentage change)
Source: Manheim Auctions; CarMax estimates; the School, Home and
Office Products Association estimates; and the Home Improvement
Research Institute estimates
Source: Manheim Auctions
1- to 6-
Year-Old
Used
Cars
School and
Office
Products
Home
Improve-
ment
U.S.
Used Car
Market
$366
$265
$229
$212
RETAIL MARKET SIZE
(In billions)