CarMax 2006 Annual Report Download - page 6

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HUGE
■With annual sales of approximately $370 billion, used
vehicles comprise nearly half of the U.S. auto retail
market, the largest retail segment of the economy.
■In 2005, there were an estimated 44 million used
vehicles sold compared with 17 million new vehicles.
■CarMax’s primary focus — 1- to 6-year-old vehicles — is
a market estimated approximately at $280 billion in
annual sales and 21 million units per year.
■The used vehicle market is substantially larger than
other large retail categories such as the school and office
products market ($206 billion in estimated annual sales)
and the home improvement market ($291 billion in
estimated annual sales).
STABLE
■Only three times in the last 20 years 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 generally resistant
to typical economic cycles. As the economy improves,
buyers who move from late-model used cars to new cars
are replaced by buyers who move from older, higher
mileage cars to later model used cars.
■This stability provides the foundation for CarMax’s
market share growth strategy in both existing and
new markets.
Compelling Market
1
4CARMAX 2006
-15
-10
-5
0
5
10
15
% Change Used Vehicle Unit Sales % Change New Vehicle Unit Sales
05
03019997
95
9391
898785
Satellite superstore showroom
USED VEHICLE SALES STABILITY (Percent change)
Source: Manheim Auctions and ADESA, Inc.