Mexican used car platform Kavak is investing $180 million to open offices and make its platform available in four new countries, including Turkey, its first location outside of Latin America, the company said on Wednesday.
Kavak, which calls itself the world’s largest second-hand car company, will enter Colombia, Chile and Peru with an expected investment of $120 million. The platform has earmarked $60 million for its expansion to Istanbul, Turkey, CEO Carlos Garcia said.
“Turkey is a $120 billion market, so it’s a great opportunity,” Garcia said in an interview with Reuters. “They face problems similar to those we face in Mexico and Brazil,” he added, referring to fraud in the sale of used cars and difficult access to financing.
The SoftBank-backed startup 9434.T is valued at $8.7 billion, according to Garcia, and has seen rapid growth in Mexico, which accounts for 60% of its operations. Kavak also operates in Argentina and Brazil.
However, this growth has not been without obstacles. Kavak cut some 150 positions at its Sao Paulo and Rio de Janeiro operations last month, less than a year after its expansion into Brazil, as a result of investing ahead of growth and needing to adjust to changing market conditions. Garcia said.
He added that Kavak does not currently expect “mass layoffs.”
The company has also faced highly publicized complaints on social media about its customer service in Mexico.
Garcia attributed some of them to delays created by government office closures, which delay the paperwork needed for used car sales.
“We have a group of users that we could certainly serve better,” Garcia said.
