Carvana has been dogged by production woes since the onset of the coronavirus pandemic but showed signs of improvement in that area — turning around vehicles for sale — in the first quarter as it reported higher revenue and a narrower net loss.
Production for the online used-vehicle retailer means getting used cars and trucks sale-ready: receiving, inspecting and reconditioning them.
Carvana added staff to its reconditioning facilities during the first quarter and improved weekly average vehicle production by 26 percent compared with the fourth quarter of 2020. The improvement has continued — Carvana's weekly production rate was 51 percent higher in April and early May than in last year's fourth quarter.
But the retailer's average available inventory for sale was down 27 percent in the first quarter compared with the fourth quarter.
Carvana has struggled with low inventory — and keeping pace with consumer demand — for nearly a year. The company stopped acquiring vehicles in March 2020 early in the coronavirus pandemic and saw sales fall off sharply in April before starting to recover later that month. By the end of that quarter, Carvana's inventory had fallen to its lowest level in almost two years.
The company is still "just trying to catch up," CEO Ernie Garcia said in a conference call with analysts and investors last week after Carvana reported earnings.