Auburn Hills, one of the suburbs north of Detroit, has been selected as the potential second location in the state for a “car vending machine” from Carvana Co.
The Phoenix-based used car e-commerce company, which has been in money-losing mode for much of this year, submitted a development application to build a 12-story steel-and-glass tower that would display used cars, according to an announcement Friday from the city of Auburn Hills’ community development department.
Should the estimated $15 million investment obtain approvals from the northern Oakland County city’s planning commission and City Council next month, the company is targeting a construction start in late 2023 or early 2024 with completion 10 months later, according to the announcement.
The proposed tower would be built adjacent to Topgolf Auburn Hills on Great Lakes Crossing Drive off of I-75. Carvana has 33 car vending machines in total, including one in northwest of Detroit in Novi, Mich.
A Carvana spokeswoman declined to comment on the specific proposed project, but said the company would likely have more details to share if it obtains regulatory approvals and starts building.
“Carvana has been able to separate itself from other internet auto sales companies by offering its customers a physical location, like the future Carvana Auburn Hills, where they can pick up their vehicles,” Steve Cohen, director of community development for the city of Auburn Hills, wrote in the announcement.
The proposed project is slated to be in front of the city’s planning commission at its 7 p.m. Sept. 14 meeting and final approval could come from City Council on Sept. 26.
The announcement comes as Carvana, which found success with its model during the COVID-19 pandemic, has been experiencing financial struggles. An earnings report earlier this month showed the company lost $945 million for the first half of this year compared to a loss of $37 million during the same time period in 2021.
Carvana CEO Ernie Garcia said earlier this month that the retailer in the most recent quarter “shifted our priorities for the first time in company history to favor efficiency and cash flow in recognition of the changes to the market and the economic landscape, as well as to enable us to quickly adjust to changes in our industry that had caused our expenses to be out of balance with sales volumes.”
— Automotive News contributed to this report
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