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MEXICO CITY, Oct 11 (Reuters) – Mexico’s online used car company Cavac has expanded its presence in emerging market countries by expanding into the United Arab Emirates (UAE), Oman and Saudi Arabia, the company’s chief executive Carlos Garcia said. Reuters on Tuesday.
Kavak plans to invest 130 million dollars in the three Middle Eastern countries in the next two years, which represent 7-10% of his business, Garcia said.
The SoftBank-backed platform, valued at $8.7 billion and said to be a Latin American startup, has entered the Emirates and Oman through a merger with local firm Karzati. He established his own operations in Saudi Arabia.
“Consumers in these three markets are looking for luxury cars at low prices…so used cars in good condition are their preferred option,” Garcia said.
According to Garcia, 40 percent of used car market transactions are completed fraudulently, and Kavac’s algorithm helps to ensure safe sales and create a price structure for a “virgin” market.
According to the company’s data, the used car market in the Gulf countries is worth an estimated $35-40 billion.
Kavak, which buys, repairs and resells used cars, has grown rapidly at the age of 6 and is now operating in 10 countries.
In July, it announced a $180 million investment to expand outside Latin America for the first time to Chile, Colombia and Peru, as well as Turkey.
However, its rapid growth has encountered some speed bumps along the way. Cavac cut more than 100 jobs from its Brazilian offices in June and has faced criticism online about its customer service in Mexico.
“We realign our workforce every year,” Garcia said when asked about the cuts. Customer satisfaction levels are high in Mexico, with nearly 70% of users recommending Kavak after purchasing services.
Kavak is not planning any further expansions this year and will focus on existing operations.
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Reporting by Valentine Hilaire; Editing by Leslie Adler
Our Standards: The Thomson Reuters Trust Principles.
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