Pandemic revs up race for US online car sales

Brandon Parrum, general manager of CarMax's Des Moines store, shows where customers who arrange to buy a car on line can come for"contactless" curbside pickupShare this contentNow comes a race to spend vast sums on digital commerce platforms specifically designed to handle auto sales. Without deep pockets, many startups and others trying to join the online game will likely be left in the dust.

"With coronavirus we've seen an additional shift in desire to purchase vehicles online," said Carvana CEO Ernie Garcia, whose company has grown by triple digits for six years running.Investors are buying in. Vroom's shares are now trading at more than double their US$22 launch price on June 8. Carvana's market value is near that of No. 2 U.S. automaker Ford Motor Co , though it has yet to post a profit.

Rival Vroom has spent around US$1 billion on its online platform and inventory so far. It hopes some day to also use the platform to sell auto parts or insurance, or to serve as a marketplace for smaller auto retailers, CEO Paul Hennessey said. Industry experts say Amazon.com Inc , which provides auto research for consumers but does not sell cars, has a huge potential in online vehicle sales. But the e-commerce titan, which has seen its profit surge during the pandemic, declined to comment.CHALLENGE FROM DEALERS

Major automakers have been pushing for more online new vehicle sales, especially after COVID-19 shuttered many dealerships.

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